At work we ran into this bug the other day, looking into it I found out that Adobe hasn’t put any effort into documenting this one so I thought I’d give it a shot myself in order to try and raise awareness.
In short, the bug occurs with Flash content playing H.264 video in Internet Explorer with certain version of the Flash Player older than 10.0.32.18. Under these circumstances, if the video its playhead is set back to the start (seeking) then Flash Player will crash Internet Explorer — not slowdown-crash, but actually end the process; the browser-window will be closed down (and with that, your Flash application).
We had this bug occur in both Internet Explorer 7 and 8, and upgrading the Flash Player to a newer version (10.0.32.18 or later) made the problem go away. I’m not completely sure whether this problem has been present since HD video functionality was introduced in the Flash Player, or that perhaps it only started later on. The computers we experienced this bug on though, had either Flash Player 10.0.2.54 or 10.0.12.36 installed.
I don’t exactly know in which part of the native Actionscript libraries this issue starts, I presume it’s in the VideoPlayer class (as I take it that that’s where the actual video logic is implemented), but it might as well be in the FLVPlayback component.
Of course any additional information is very welcome, leave it in the comments. Also, there’s this one thread in the YouTube Community Help Forums that was somewhat helpful, check it out if you’re interested.