Error on flash upload when the site requires user authentication

To all techie guys out there, this is my geek side were I will share my experience on flash upload specifically using uploadify. The scenario is:

We implement a file upload using flash upload with the help of uploadify, the script is working fine not until the site implements Basic User Authentication. The tricky part is that the authentication behaves differently on each case.

Video upload result:
- Host PC (successful) IE 7 / flash player 9.0
- Host PC (successful) Firefox 3.5 / flash player 9.0
- VM (successful) IE 8 / flash player 10.0
- VM (failed) Firefox 3.5 / flash player 10.0

After further tests it seems that flash player has an issue in regards with submission of cookies, or maybe its firefox.

- http://www.uploadify.com/forum/viewtopic.php?f=5&t=43
- http://swfupload.org/forum/generaldiscussion/383

Well, upon further reading I stumble upon this article.

'Flash Player does not offer complete support for servers that require authentication. Only SWF files that are running in a browser using the browser plug-in or Microsoft ActiveX® control can provide a dialog box to prompt the user to enter a user name and password for authentication, and then only for downloads. For uploads using the plug-in or ActiveX control or upload/download using either the stand-alone or external player, the file transfer fails.'

http://livedocs.adobe.com/flash/9.0/main/wwhelp/wwhimpl/common/html/wwhelp.htm?context=LiveDocs_Parts&file=00000320.html

In short, flash encounters errors when a server requires authentication. And for now no solution yet.