ok, i have tried your script and the clips instance names are correct

to test i made another game, and the same thing is happening

this is my entire code for the first clip:
Actionscript Code:
onClipEvent(enterFrame){
if(Key.isDown(Key.RIGHT)){
    this._x += 2;
}
if(Key.isDown(Key.LEFT)){
    this._x -= 2;
}
if(Key.isDown(Key.UP)){
    this._y -= 2;
}
if(Key.isDown(Key.DOWN)){
    this._y += 2;
}
}

onClipEvent (enterFrame) {
    if (_root.moving, hitTest(_root.block)) {
        gotoAndStop(2);
    }
}

and i have no script for the other clip (block)

here is a link, i uploaded it and you can see what is happening if you want
http://jhtechno.com/projects/flash/testgame.swf (for some reason if wont work in the browser)

http://jhtechno.com/projects/flash/testgame.fla (if you want the original)