I'm no Flash expert either, but I suspect it has to do with where it expects the xml file to be located. It may expect it to be relative to the .swf location or it may expect it to be relative to the site root or some other scheme. If the xml file is in the same folder as the flash you may only need to specify the file name.
To make it as close as possible to the example html you should try putting the .swf and .xml files in the very root of the site and then just specify the urls like /banner.swf, /settings.xml, try it with and without the /, but I suspect it needs the /
Also, you don't need to load swfobject script yourself, it is included with mojoPortal, just set <portal:ScriptLoader ... IncludeSwfObject="true"
Hope it helps,
Joe