I tried this on my prototype Chumby, and the issue is not that onLoad causes the a crash, but that the onLoad() never gets called, and therefore the application crashes. You will notice the same behavior on your desktop if you comment out the onLoad function above.
The reason the onLoad doesn't get called is that the swf is loaded into the control panel swf. In such cases Flash doesn't call the onLoad function on the loaded timeline. You can try this even without the Chumby, as I did:
1. publish the above code as is, with the onLoad, and save as points.swf
2. Create a swf called loader.swf, with only 2 lines of code:
mc = this.createEmptyMovieClip("mc",1);
You will see that even though points.swf runs fine, when loader.swf loads it, it will hang because the onLoad function isn't called.
According to other posts, the production Chubys will create a new instance of the flash player for each swf, so it will not be loaded into another, and therefore the onLoad will be called, and your program will work fine. (BTW, I like the effect you created.)