According to the Flex docs this is possible: "The VideoDisplay control lets you play an FLV file in a Flex application. It supports progressive download over HTTP, streaming from the Flash Media Server, and streaming from a Camera object."
But how do I attach a NetStream (which is playing my live stream) to the component for display? It seems to only have an attachCamera method and a source property, but no attachNetStream method.
It appears that this component manages it's own NetConnection and one has to feed it with a full RTMP string (which can point to a pre-recorded stream or a live stream):

view plain print about
1viddisp.source = "rtmp://myserver.com/app/live_stream_name";
The syntax above works for me if I have a live stream called 'live_stream_name' playing.
But this a bit sucky for my particular app which consists of a broadcaster and a receiver. Both parts manage their own NetConnection (the text chat I'm using needs an NC regardless of video) and the fact that the VidoDisplay component establishes its own connection results in errors (the NC's callbacks I use elsewhere are not found for the component's connection).
What's also confusing is that on the broadcasting side I can use the component just fine via attachCamera and then a separate attach to the NetStream. So the component works on one end but not the other (if that makes sense). There's probably a way of hacking it so that it can use your own NC but that seems to be overkill here.

It would be good if you could pass the component a reference to a playing NS instead of a full RTMP address. For now I'll have to roll back and use a plain Video object to make this work.