Archived:Security sandbox issue in Flash Lite may prevent network access (Known Issue)
Flash content is not able to create a network connection unless the content is trusted content located in c:\data\others\trusted).
Flash Lite 3 Player is compatible with Flash Player 8. It implements the same security sandbox implemented by Flash Player 8. The security sandbox is described on the Adobe Web pages:
Flash content published for Flash Lite 2.X needs to update the security sandbox to Access the network only or Access to the local file system and the network to create a network connection.
Adobe provides a tool to update the sandbox in published Flash content. Link to tool
The tool is available under section "Local Content Updater".