It isn’t clear from this thread whether you suspect that the Flex client isn’t sending X10 commands appropriately or whether you suspect something specific with Steve’s setup.
I can verify that the Flex client works with X10 devices in my setup (I also have PLM revision 63) using IE8 in compatibility mode. On/Off/Bright/Dim all work.
It looks like the Flex client uses Adobe Flash. My IE reports version 10,0,22,87. The one thought I had was to make sure the Flash version is up to date.