Hi All ! Is it good idea to have my logical chat application to be split into
three physical application directories, a lobby, a room (with instantiating
several rooms of course) and a one-to-one chat application. Is this better than
having a unified script for it all ? I am planning to route communication
between lobby, rooms and one-to-one chat through server-to-server NetConnection
communication logic. I am new to FCS, but have a farily good experience with
network programming.

Hmmm.... I think you can still use one application for all of it and create
diffrent SS components for each....... I think many people create diffrent
applications to organize the code easier...... but if everything is in diffrent
classes it can still be organized..... check out the source code examples for
this flash com book..... http://flash-communications.net/sourceCode/index.html
in one of the chapters they have a good example of it......