Hey, I ended up solving this problem - The shared object works fine when the swf is in images so no need to move it to the root after all. For anyone else having a problem with cookies STAY AWAY from the 'turning Globals ON solution' (its a very bad idea for security reasons) and remember that flash can take care of the whole thing as long as the action script for the shared object is Joomla specific. Thats all you need.
