You no longer need to try to merge or jam Flex jars and web app into a CF web app instance with Flex 2 and CF 7.0.2. With Flex 1.5, you wanted to do this in some cases, but this is no longer required now with Flex 2.
I suspect there's two reasons folks have been trying to do this: 1) either because of their Flex 1.5 + CF history (and they just assumed they needed to do the same with Flex 2), or 2) because they wanted to use FDS and Flash Remoting calls in the same Flex 2 app with CF as the back end. Ok, there is a rare third case where it might make sense, but the TechNote will be updated with that info to make that case very clear and make sure folks know that merging is definitely a highly specialized case, and NOT the norm that most people have to worry about.
Whatever the reason, I've observed some folks still trying to do this and running into difficulties in some cases.
The good news is that you can absolutely use Flex 2 FDS AND Flash Remoting in the same Flex 2 app SWF with CF 7.0.2 as the backend with "custom channels", but you do need to use setRemoteCredentials() independently on each (credentials don't automatically pass through Flash Remoting into FDS with in this case with custom channels, but this shouldn't be a big deal, just something to be aware of when coding your app).
There is a TechNote on the Adobe site that talks about merging Flex 2 FDS into the CF web application J2EE instance, but we're revising it shortly to make sure people realize they should have no reason to do this now with Flex 2 and to talk more about using custom channels in Flex 2 apps.
Thanks to Mike Nimer and Pete Farland for this.
Mike's blogged some details here: http://www.mikenimer.com/index.cfm/2006/7/19/Flex-Data-Server-and-CF-Flash-Remoting-together
1) install CF 7.0.2, 2) install FDS2 and 3) enable Flex connectivity in the CF Admin.
and you're good to go.
Either use the built-in FDS/JRun install option and put it in it's own directory, etc, OR deploy it into it's own web app instance.
That's it! Really!