The first time a SWF connects to your app, an application instance is created .
It remains in memory until you unload it, unitil you restart it that is unload
and then start the server again or until it times out from inactivity. Even if
you close all connections to FCS that is , close the SWFs that are connected,
the app instance and all application variables remain in memory until the
instance unloads Although you can always restart the entire FCS server.
sometimes you only need to restart an individual app instance.

excerpt taken from
Flash MX 2004 for rich internet applications
by Phillip Kerman