not a clue about xml and flash but it seems to me that flash would be expecting XML output ? 'Hello' is badly formed so perhaps flash is rejecting it ?
MVC is the current buzz in web application architectures. It comes from event-driven desktop application design and doesn't fit into web application design very well. But luckily nobody really knows what MVC means, so we can call our presentation layer separation mechanism MVC and move on. (Rasmus Lerdorf)