1) if the letter input by the user matches a letter in the word then have that letter appear in the appropriate text box (should be able to use array returned by prototype to target appropriate text box right?)
Code:
// this assumes your word is in string 'wordStr' and your letter_boxes are named letter0 thru letterN

function showMatchingLetter(letter)
{
  for (i = 0; i < wordStr.length; ++i) {
    if (wordStr.charAt[i] == letter) {
        _root["letter"+i].text = letter;
    }
  }  
}
2) how do you write an if statement for an empty array? if array returned by prototype is empty then the user guessed a letter that isn't in the word.
Code:
if (array == undefined || array.length == 0)
{
  // array is non-existant or empty
}
3) Create a new word when the 'play again' button is pressed.
Put the code you are currently using to setup your code into a function.

Call this function once after you define it, to setup your game. Call it again, when the user presses the 'play again' button.

Code:
function setupGame()
{
  // code you are currently using to setup the game...
}

setupGame(); // call it once to set things up..
You will probably find that to reset the game, you will need to do a few additional things, such as reset the various arrays you have been using

myArray = [];

and clear the contents of your text boxes.

- Jim