Ok here is what I found from a clue in this thread (thatnks jel3 ! )
There was another copy of swfobject.js !
Just searched in my plugins directory for the swfobject file.
The fix/correction was to replace the older swfobject.js located in the wp-simpleviewer directory with the one from the latest one in the nextgen-gallery/admin/ directory.
So the issue is NOT with nextgen it is with the wp-simpleviewer and its older swfobject.js (its smaller ~6880 vs the nextgen at ~9763)
Thats it. All the other code is unmodified and working as expected