Assignment

I have two problems which I highly suspect are connected but am not sure where to look for the solution. I cannot download files that aren't .pdf (ie .doc or .ppt). They seem to get corrupted in the process of downloading them. Further I cannot get the .flv files to play. I have enabled the multimedia filters but they only buffer and never actually get around to playing.
After looking at a text file in a hex editor it appears that moodle is adding two line feeds to the beginning of the files which of course makes Word etc not able to read the header properly. Does anyone know what setting I messed up?
Currently running Moodle 1.9.9+ (Build: 20100623) on a Linux server.

Also posting this question in the install area in case someone there is more familiar with this problem.
Thanks in advance.