I HAVE read the referenced responses on this subject, but nothing relates to my basic issues.
When i upload a .flv file into an album, i get a confirmed upload but nothing shows in that album. When i place the FLV file into the directory manually, I get an default album thumbnail, but when i click on the album, it shows no files.
What am i missing?

It works, I had to install the FLV Player plugin

yeah, you have to add the flv player as it's not distributable due to license restrictions. Speaking of which you should peruse them as you're not allowed to use the flvplayer on any commercially oriented sites.

The other option would be to use flowplayer which is included and does not have that restriction.

Just to clarify: The flv player files are included with 1.2.6 but will not anymore with 1.2.7.