you also need to change xml namespace (main html tag) to this:
<html xmlns="http://www.w3.org/1999/xhtml" xmlns:fb="http://www.facebook.com/2008/fbml" xml:lang="en-gb" lang="en-gb">
It's not that simple actually man, the problem with loading external script files from the application sandbox is that it's not supported. Technically, by using iframes, you should be able to do this and it works but it's still impossible to use XFBML in the root document after from my experience. After two days of trial and error, the easiest way to do use Facebook Connect in an html/ajax adobe air application is to download the actionscript library and include it as such:
<script type="application/x-shockwave-flash" src="lib/facebook.swf"></script>
<script type="text/javascript">
var FB = window.runtime.com.facebook;
var fb = new FB.Facebook();
var session = new FB.utils.DesktopSessionHelper();
//etc...
</script>
then just refer to the documentation. my only problem now it that I still haven't found an efficient enough way of using XFBML in adobe air, simply adding the facebook namespace to the html tag doesn't do the trick unfortunately. If any knows, please do share thanks