I had been searching around for days for a solution to a problem many encounter. According to many blogs online the computeSpectrum method of the SoundMixer class only works with a vod stream from Flash Media Server, Wowza Media Server, or Red5. On a few of these blogs folkes even went as far as to try to code custom java classes to inject that data into the stream flowing to the flash player.
While a custom solution may work I stumbled upon the answer in a random list posting. By default the netstream buffertime is set to 0.1 by the player.. the strange thing is if you manually set this value the compute spectrum method starts working.... even if you manually set it to 0.1.. you only have to set it to a non-zero number.. very strange I know but it's a viable solution to a perceived limitation. I hope they address that in the next version of the player.