ActionScript 3.0 :: URLRequestHeader Standalone Application

I am having an issue trying to set http headers when trying to access a web service.
 
I have read that I need a crossdomain.xml on the server, but is this only when the application is running in a browser - i.e. hosted somewhere.
 
My scenarion is that I am developing an app to run as a stand alone application (not in the browser) for a 3rd party device.  This device does not support the flex mx packages.
 
The app calls a webservice and displays data.  The webservice requires to be authenticated.
 
In JS i can use an XMLHTTPRequest and load the url using "https://username:password@server.com/service.asmxpassword@server.com/service.asmx" - attempting to do this in AS 3 using a URLRequest and URLLoader I get "#2044: Unhandled ioError:. text=Error #2032: Stream Error".
 
So I try to add a HTTP header instead, but this appears to be ignored - the credentials of the user who is currently logged into the network (idsid) is used instead.
 
Do i need a crossdomain.xml file on the server hosting the webservice even though my flash application will never be hosted.  The server admin is not happy allowing all domains ("*") since I dont knwo what domain I am in as my flash app is not hosted.
 
Any help you can give me would be greatly appriciated.  or perhaps there is an alternative way of doing this?
 
<code>
var urlRequest:URLRequest = new URLRequest("https://server/service.asmx");
urlRequest.method = URLRequestMethod.POST;
urlRequest.contentType = "text/xml";
 
urlRequest.requestHeaders.push(new URLRequestHeader("Content-type", "text/xml"));
urlRequest.requestHeaders.push(new URLRequestHeader("Authorization", "Basic " + escape(usr) + ":" + escape(pwd)));
urlRequest.data = getSoapData();
 
 
var urlLoaderService:URLLoader = new URLLoader();
urlLoaderService.dataFormat = URLLoaderDataFormat.TEXT;
urlLoaderService.addEventListener(Event.COMPLETE, onServiceLoaded);.....