Hi Carl, thanks for the quick response!
Your suggestion is essentially what I've done at this point (option 2). Now that I've removed the DisplayObjectContainer and turned mediaContainer back to a Sprite, it doesn't throw the error any more but still doesn't seem to be adding the loaded swf to the container as when I change the x, y, coords of the container, the swf doesn't move accordingly. Also I put a trace statement after the loader and it shows that mediaContainer has 0 children.
public var mediaContainer:Sprite = new Sprite();
...
addChild(mediaContainer);
public function LoaderMax_subload_parent():void {
var subloadSWFpath:String = menuXML.slide[slideIndex].mediaPath;
var swfScale:Number = menuXML.slide[slideIndex].mediaPath.@scale;
trace("swfScale = " + swfScale);
_swfLoader = new SWFLoader(subloadSWFpath,
{ container:mediaContainer,
scaleX:swfScale, scaleY:swfScale,
onComplete:_completeHandler});
_loadHandler();
trace("mediaContainer children = " + mediaContainer.numChildren);
private function _completeHandler(event:LoaderEvent):void {
//add the SWFLoader's content to the stage
addChild(event.target.content);
setChildIndex(event.target.content,0);
}