I recall reading about this in the article "Tracking with Flash "Cookies"" (
http://www.informit.com/guides/content.aspx?g=security&seqNum=276 last fall. Recently Windows Secrets (in their paid content section) ran a more in depth article by Woody Leonhard, "Flash cookies are putting your privacy at risk".
On public access computers using some type of disk protection (e.g., Windows SteadyState with disk protection enabled, Deep Freeze, Clean Slate, CenturionGuard, etc.), the actual storage of these LSOs should not be an issue. However, storage of them may be an issue on staff computers. And you may want to tweak the
settings on both public and staff computers. The settings manager is actually accessed via the web --
http://www.macromedia.com/support/documentation/en/flashplayer/help/settings_manager.html, and more specifically
http://www.macromedia.com/support/documentation/en/flashplayer/help/settings_manager.html#117118.
Please note that these "cookies" are
not controlled by your web browser! Nor is it necessary for there to be any visible Flash content on a page for them to be used!!