Since ports below 1024 require root permissions in order for processes to use them on OS X, and I didn't want to run some other server process just to serve policy files, I needed to kludge a way to send the policy file from my nice, elegant socket server every time a client connected and requested a policy file. The example below is a simplified version, as it only listens on one port - the project I was working on was basically a proxy from one SWF to another, so I had two socket servers that needed to listen for the requests for a policy file and respond. In this example, the server listens for connections on port 5208, and simply echoes incoming data from the client to System.out, and has some visual feedback in the window. When the incoming message contains the string "policy-file-request" (the entire message from Flash will be terminated with a null char), we simply spit back the XML for a wide-open socket policy, followed by a null char (This is required, or the Flash player will not accept the policy file. This is what tied me in knots last night. RTFM!)

import processing.net.*;

int bgLevel = 0;
int port = 5208;
Server server;

String flashDomainPolicy = "<?xml version=\"1.0\"?>"
                              +"<cross-domain-policy xmlns:xsi=\"http://www.w3.org/2001/XMLSchema-instance\" xsi:noNamespaceSchemaLocation=\"http://www.adobe.com/xml/schemas/PolicyFileSocket.xsd\">"
                              +"<allow-access-from domain=\"*\" to-ports=\"*\" secure=\"false\" />"
                              +"<site-control permitted-cross-domain-policies=\"all\" />"
                              +"</cross-domain-policy>";

void setup ()
{
  size(200, 200);
  server = new Server(this, port);
  background(bgLevel);
}

void draw ()
{
  Client client = server.available();

  if (client !=null)
  {
    String message = trim(client.readString());

    if (message != null)
    {
      if (match(message,"policy-file-request") != null)
      {
        sendFlashPolicy(server);
      }
      else
      {
        server.write(message);
        System.out.println(message);

        // Change the background color to indicate message activity
        bgLevel = 255;
      }
    }
  }

  // Fade to black
  if (bgLevel>1)
  {
    bgLevel-=2;
    background(bgLevel);
  }
}

void sendFlashPolicy(Server socketServer)
{
    socketServer.write(flashDomainPolicy+char(0));
    System.out.println("Sending Flash policy file");
}

You can test this without a Flash client by firing up the sketch and telnetting to the port. Any strings you send will be echoed to System.out, unless you send the string "policy-file-request" in your message, which will result in the server sending the policy XML to you. You should be able to connect a Flash client to this server and start communicating right away.

I spent half a day narrowing it down. Since my text was originating from XML, it first masqueraded as some sort of entity or character encoding problem. I messed with TextFormat and StyleSheet (mutually exclusive by-the-way). A later wild goose test-case showed that flipping the autosize flag off made the issue disappear. Fine, but I need autosizing.

When Andreas Heim pointed out the solution, I remembered I'd run into this before: "Do you happen to be using 'Anti-alias for readability?'" Sure enough, flip it to "Anti-alias for animation" and all's well with the world.

I can only hope that the Flash 10 player addresses this bug. With all the work that's gone into its type rendering features in this revision, I'd certainly assume so. I'll post some test cases / screenshots in the next update.

Download example FLA & SWF

Update: Screenshot of effected swf. Verified broken in Flash 10 beta player.