The reason I'm asking is I'm teaching a basic flash game making course this summer and I want the students to be able to save variables locally on there computer.

Using this shared object is really easy way to do that, and I wanted them to be able to direct where the object is being saved to. This way they could keep a variable like a high score in the same folder as the swf they create, so that when they want to take there game home with them and move it to another computer all they need to do is move the folder all as one with this shared object in it.