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[Bomb Bloke]

It seems the FLV specifications received an update about a month or so ago. XBMC isn't yet fully compatible with files using the new encoding.

You can try using the DVDPlayer on 'em, though. Highlight the file and press the white button, then select Play Using from the context menu.

[Bomb Bloke]

Yes, via the defaultplayer tag for videos, within the advanced settings file.

You cannot do this on a "per extension" basis, though.