Steps to reproduce:
Fill out login dialog
Notice page refreshes due to socketClosed event.
I believe the issue is related to the null byte that is sent when using XMPPConnection's XMLSocket (in XIFF). Thus, we should use the XMPPSocketConnection which relies on the Socket class, and doesn't have the null byte at the end of its packets. As well, we shouldn't have to use the <flash:stream> type and can use the standard <stream:stream>.
Fixed in trunk, ConnectionManager uses XMPPSocketConnection now.