In the local browser when right-click on a video file and select Explorer Menu > Play with windows media player it opens the video and starts playing without any issues.
This was tested on Windows 7 64bit and Windows 7 32bit.
When doing a google search for "Server execution failed" there's a lot of people who have this issue with windows media player in general, perhaps some of the suggestions offered might resolve it.
As far as I can tell this doesn't appear to be caused by FlashFXP.
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