Crossdomain.xml - This is my guess at what this xml does. Don't take my word for any of this :-). Crossdomain.xml gives web applications access to files from one domain (ie: server) to another domain (ie: server) within a specific web page. So an web page on one server can access content on another server. This added security seemed to be introduced with IE 7 if I remember correctly.
Create a file called: crossdomain.xml
Place this file in the webroot of the server. (IIS ex: C:\inetpub\wwwroot)
The following XML code will give full access to the servers just like before the new security was added to IE.
<!DOCTYPE cross-domain-policy SYSTEM "http://www.macromedia.com/xml/dtds/cross-domain-policy.dtd">
<allow-access-from domain="*" />