You said that placing the .flv file in the root of the web app and then specifying the filename in the config file works. What if you place the .flv file at a lower level - like the mediaobjects directory - and then specifying the path to it in the config file? Example: your config might look like this:
...
s1.addParam('flashvars','file=/gs/mediaobjects/NewlyWedFirstDance_F8_512K.flv');
...
Actually, now that I review your original post, I may have spotted the problem. Look closely at this line:
s1.addParam('flashvars','file=/gs/mediaobjects/david's gallery/Wedding Videos/NewlyWedFirstDance_F8_Lg.flv');
The apostrophe in "david's" is messing up the javascript. Try adjusting your album titles to eliminate apostrophes and spaces and see if that makes a difference.
The parameter {MediaObjectAbsoluteUrlNoHandler} doesn't expect to be used in javascript so it is not escaped. Off the top of my head I am not sure of a fix other than to not use invalid characters in your album title.
Roger Martin
Creator and Lead Developer of Gallery Server Pro