While upgrading a site and adding in flash, I got this nice little “feature” in IE. When every you hover over the embeded flash file, it A) creates a border around the file and B) asks you to “click to activate and use this control”.
After a little research, I figured it out. The problem stems from Microsoft ActiveX Change. The resolution is quite easy. All you have to do it have JavaScript insert the flash instead of embeding it into the HTML. The solution is demonstrated below.

As you can tell, all I am doing is passing the ID of the div, the url, width and height of the flash and letting javascript embed it for me.
