Hi Mike,
I'm glad your app is starting to happen (who knows, you may even be done by now)... But here's my best shot at answering your questions:
1. Flex is a framework that uses MXML, a declarative XML-based language, to describe UI layout and behaviors, and ActionScript 3 to create client logic. Flex has a big component library -- you use MXML to place the components in an app. Flex apps compile to SWF files and run in Flash Player and AIR. So the Flex example that ships with the DynamicStream class does have some ActionScript in it that you can stop out and use in Flash. the example includes an MXML file that you can open in any text editor.
Here's more info about Flex:
http://www.adobe.com/products/flex/overview/
By the way, a simple DVR sample ships with FMS: Flash Media Server 3.5\documentation\samples\dvr
The sample is explained in the docs:
http://help.adobe.com/en_US/FlashMediaServer/3.5_Deving/WS236AE81A-5319-4327-9E44-310A93CA09C6.html#WSF121A57E-01CB-44a4-BDA8-46CD5045E80D
2. To create a DVR stream from FLME you need to either check DVR Auto Record (starts recording when you start streaming), or click Record anytime after you start streaming.
3. To subscribe to a stream use 0 for the start parameter -- 0 plays a recorded stream. DVR streams are just recorded streams.
HTH!
Jody