There's a new version of Flaraby out and the demo looks like many of the quirks that I hit have been worked out of it. Very nice.

I haven't had a chance to get it and look into how it does the magic but it looks like it still requires you to embed one of two fonts.

The word on the street is that Flash Player 10 will support bi-directional text and so will support Arabic and English in the same TextField. However.. .it may be some time before everyone can target that Player since it takes a short while for enough people to install it. In the meantime maybe Flaraby is an option.