Thanks for your suggestions, I am able to display other flash files just fine which reside in {$ImageDir}. It is just this one which utilizes an .xml file. To be more clear, if I was to place my cursor where the flash movie is supposed to be on the screen and right-click my mouse, I would get the macromedia options associated with a flash file. So the flash movie is loaded with its plain white background, but the .xml file which provides it content is somehow not being passed through. It is this that I believe Smarty is interfering with. See for yourself, the menu should be loading on the left-side of the screen:
http://www.deals-on-deals.com/xcart
Any suggestions are appreciated.
Thanks,
Glen