MACROMEDIA FLASH 8-LEARNING ACTIONSCRIPT 2.0 IN FLASH Manual page 681

Local-with-networking
When local SWF files are assigned to the local-with-networking sandbox, they forfeit their
local file system access. In return, the SWF files are allowed to access the network. However, a
local-with-networking SWF file still is not allowed to read any network-derived data unless
permissions are present for that action. Therefore, a local-with-networking SWF file has no
local access, yet it has the ability to transmit data over the network and can read network data
from those sites that designate site-specific access permissions.
Local-trusted
SWF files assigned to the local-trusted sandbox can interact with any other SWF files, and
load data from anywhere (remote or local).
About Flash Player security settings
Macromedia has designed Flash Player to provide security settings that do not require you to
explicitly allow or deny access in most situations. You might occasionally encounter legacy
Flash content that was created using older security rules for Flash Player 7 or earlier. In these
cases, Flash Player lets you allow the content to work as the developer intended, using the
older security rules; or, you can choose to enforce the newer, stricter rules. The latter choice
ensures that you only view or play content that meets the most recent standards of security,
but it may sometimes prevent older Flash content from working properly.
All users who view SWF files (including non-Flash developers) can set permissions globally
through the Global Security Settings panel in Flash Player's Settings Manager (shown in the
following figure).
About local file security and Flash Player 681