When upgrading Flex Builder 2
I found a step in the Adobe Flex 2 Installation (2.0.1 Update) that might when upgrading and trying to open existing projects.
Here is the step that I found useful:
Opening existing projects – The first time you open an existing Flex Builder project, you should refresh the workspace by using the -clean option. To do this, open a command window, navigate to the Flex Builder directory, and type FlexBuilder -clean -vmargs -Xmx512m.