As far as I know, Flash has to pass info off to another external process in order to save files - POSTing to PHP or talking to an executable, right? But every once in a while I hear rumors that Flash is able to open a file, make changes, then save/write those changes, all on its own - is it possible?
The next version of the player, Flash 10 can do this. It also has support for some other nifty stuff like simple 3D and typed arrays. The flash player running inside AIR can also do this.
There is something called Local Shared Object, also known as "Flash Cookie" that allows you to store a limited amount of data locally at a user's computer.
A little googling turned up a few links:
And I'm sure a little creative googling can turn up even more
There are lots of security issues around the behavior you just described so Adobe put many sandbox restrictions around file modification behavior. Even with Flash Player 10, expect a requirement that the file manipulation require that the code be executing in response to a mouse event.
This will be available in Flash Player 10:
Reading and Writing Local Files in Flash Player 10
http://www.mikechambers.com/blog/2008/08/20/reading-and-writing-local-files-in-flash-player-10/
Otherwise you need to use Adobe AIR, or bounce it off the server.
mike chambers