No, streaming of MP3 is not supported in FlashLite 2.

It will download and and attempt to play MP3 files once they're completely downloaded - however, the current chumby player does not support it.  We're working on a version that will.

For the time being, you'll have to embed MP3s in SWFs - you can do a server-side script to do it using something like Ming.

I've worked on a prototype which uses Ming to put mp3s in a swf wrapper. It already can stream my entire mp3 collection with the help of a local server but the reason why I haven't published it is that the chumby always chokes on certain mp3s which is probably caused by the datarate or the package size produced by Ming. I've already tried an alternative solution using ffmpeg, but the result is the same. What is interesting though is that the Chumby never seems to choke on mp3s embedded in swfs that have been exported with the Flash IDE. Looking at the swf structure of those files with a Flash decompiler reveals that the packages are indeed slightly different. The problem is that I don't know how to tell ming or ffmpeg to use different package sizes.

My next task is to use some kind of preprocessor which reduces the datarate of the mp3s before packaging then in Ming.

Here is some basic PHP code to wrap mp3s into swfs using Ming - it assumes that you have done some preprocessing and know the length of your mp3 in seconds. You also will need PHP with the Ming extension compiled in.

<?php
       // $mp3path is the path to your mp3 file
       // $secs is the length of the mp3 in seconds
     
    $m = new SWFMovie();
    $m->setRate(12.0);
    $m->streamMp3(fopen($mp3path, "rb"));
    $m->setFrames(ceil(12*$secs));

    header('Content-type: application/x-shockwave-flash');
    $m->output();

?>

This is apparently the case with any FlashLite 2 implementation, not just chumby.  We've seen this before, and when we tried the same SWFs on other FL2 devices, we got the same result. It seems the FlashLite MP3 decoder has some sensitivities.  Hopefully this will be addressed by Adobe at some point.

Hacked a quicky chumlet and got our live webcast radio streaming mp3 on the virtual chumly. Dont have the real thing yet, but if the virtual chum is running the same flashlite version, then streaming mp3 is possible. Check out "Entertainment" "Harvest Valley Radio" . Also, I wouldnt mind developing further and providing a complete interactive flash (like our existing website www.khvr.com) for the chumly.

So we understand that in this the Chumby operates in somewhat different way that FL 2.x specs. It allows for streaming MP3s, i.e. the isStreaming parameter of loadSound() is active.
Now I doubt what you say about crossdomain is correct. Crossdomain permissions are needed if you were to access any data in the MP3 (like ID3 values). NOT needed to just play the MP3. At least that's the behaviour in FL8 and 9

Ok, so how do I get this working?

Anybody have all the pieces together?

It seems the best approach is to use a shoutcast server  and the btplay executable on the chumby.

from sshd you can execute btplay http://85.214.115.44:80

So the trick is how to enable and select different servers from the chumby without using the sshd and terminal.

In flash, can't you execute programs by opening up an XML request to
"exec:/path/to/whatever"
So maybe "exec:/mnt/usb/btplay_this"
where btplay_this is an executable:
#!/bin/sh
btplay http://85.214.115.44:80

(I dont know how well the exec: handles the spaces and such, you could probably use the HTTP escape stuff, like %20)