I get a message, "AIR proxy swf won't load"
This is telling you that either your Flash player or AIR are not the latest versions. Be sure to update them. I like to keep auto-update on because these change pretty frequently. Often the changes involve security, so it's better to always be up to date. Here is the Flash Player download page.
Another cause is that your firewall may be blocking some access that AIR needs to install. Turn it down a bit until after you've installed and then try your old settings again.