C:\Program Files\Adobe\Flex Builder 3\FlexBuilder.ini

Here are my settings
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-vmargs
-Xms512m
-Xmx1024m
-XX:MaxPermSize=256m
-XX:PermSize=64m
-Djava.net.preferIPv4Stack=true

###
-Xms512m (minimum memory allocated for FlexBuilder)
-Xmx1024m (max memory cap for FlexBuilder)

If you happen to have 8GB of ram you might change your settings to this :).

-Xms512m
-Xms4096m

Step 1: (FB3) Create a new ActionScript project in Flex Builder 3 and give it a name.

Step 2: (Flash CS3) Make a new Flash CS3 project, save it in the SAME DIRECTORY as the AS3 project.

Step 3: (Flash CS3) Open up File --> Publish Settings in your Flash CS3 project and select "Permit debugging".

Step 4: (Flash CS3) Click on the Settings button and enter the name of your main AS3 class. If your main AS3 class is not in the same directory as the FLA then add the directory as a Classplath. Click the green check mark to validate the class location.

Step 5: (FB3) Write a bit of code and put in a break point.

Step 6: (Flash CS3) Compile a debug version of the SWF. The breakpoint you entered in FB3 will be compiled into the SWF. After it compiles and opens in the Flash CS3 debugger just close it. The SWF should have been compiled into the root of your FB3 project. I had to quit FB3 and reopen it for the SWF to show up.

Step 7: (FB3) Make a new debugging profile that points directly to the Flash CS3 complied SWF (NOT THE FB3 SWF in the bin directory).

Step 8: (FB3) Debug with your new profile.

If the debugger times-out and does not connect you may need to configure the debugger setting in your Flash Player. Do this by rt-clicking on the SWF and selecting Debugger.

This workflow allows for you to use the code hinting and debugger in FlexBuilder 3 even when compiling in Flash CS3. Let me know if you run into any problems.

Special thanks to Melih Elibol who helped me with some of these steps :).

--jason