You don't need to bother with HTTPS or encryption if you use a
challenge-response methodology.  For that simple Hashing will do (AS3
corelib has a SHA256 implementation among others).  Servers sends random
text challenge to client.  Client responds back with hashed combo of random
text and the password, along with username.  Server confirms both know the
same thing by comparing hashes without ever sending the password over the
wire.  Pretty simple to implement.
 
Also depending on the application server you may not need to bother with
generating a session token and storing/passing it.  For example with ASP.NET
all HTTPService and RemoteObject calls are within the context of a user
session so on the server side we can use the built-in Session support with
no custom coding.
 
Sam

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