This post was very helpful! Thank you very much! :)
Indeed helpful, however, Flashdevelop already puts the "\bin" at the end of the path, so you'll point the path to the base SDK folder.Furthermore, for the ones who don't know which file you'll find this "java.home=" line, it's the "java.jvm" file; If you installed on the default folder, it should be "C:\Program Files (x86)\FlashDevelop\Tools\flexsdk\bin\jvm.config".
Also make sure you are using Java 1.6+ 32-bit runtime (JRE), not 64-bit.It can be downloaded from here: (which is actually not that obvious from FlashDevelop)http://www.oracle.com/technetwork/java/javasebusiness/downloads/java-archive-downloads-javase6-419409.html#jre-6u43-oth-JPR