All us SWFOject users are praying that google doesn't someday get smart and detect content overwrites from JavaScript – right? Do you think it's over the boys at google’s heads to read JS?
And don't say "well if the content is the same" - that doesn't fly 'cause the bots won't know the difference (a human, sure but not a bot which is much more likley)
If spammers abuse this, we are all screwed. (blacklisted)
if you're building your sites well, it shouldn't matter. your markup and active content (flash, JS goodies, etc.) should be in harmony, which if anything means your standing in google's rankings would be elevated. mismatched content (the kind spammers do) would be flagged as possible attempts at SEO manipulation, just like a meta tag containing the keyword "britney spears" on a page advertising mortgage loans would get flagged now.
I concur with Philip. Google already knows about content overwrites and all sorts of other tricks people use. If you are using swfoject in the way it is intended I don't think you will have anything to worry about. As it is the defacto standard for embedding flash content on web pages, Google are hardly going to start blocking all instances of swfObject :)
So what if your content for your swf is being pulled in externally (ex. xml) – google can't read that, so it has nothing to test for mismatched content. In my scenario, all it sees is that you're plastering an embedded object over your html.
"Google are hardly going to start blocking all instances of swfObject :)" Wishful thinking, google is out for google not us flash nerds. If something becomes an issue they'll just toss us all out with the bathwater (they don't bother cherry picking sites to punish/blacklist)
I love SWFObject and am going to keep using it, I'm just saying we might lose our jobs over it.