Loading flash swf's has an issue with .html. When loading a swf via {#id}.html('swf') Flash External Interface methods will not initialize properly. This bug only occurs with IE and does not seem to be an issue with Safari or FireFox.

Although {#id}.html('swf') does't work, writing a SWF via id.innerHTML='swf' seems to be fine. I'm not sure what's going on under the hood but I know that this release of jquery has some issues with Active X controls. (Or at least the compressed version did). I've attaced a demo movie illustrating the bug. I am currently trying to come up with a solution but as of yet I have been unable to.