Have you tried playing the video in the browser with flash plugin? What happens?
In the XBMC wiki they mention FLV support so there should be some way to open the video, unless you have an older version that doesn't support FLV.
FLV is just the container type: are you sure it's h264 encoded video? There are other video compression formats that you can package into an FLV as mentioned here:
http://en.wikipedia.org/wiki/Flash_Video. VLC and XBMC both specify they handle FLV so it makes me wonder if this specific video is using a different video compression format than h264.
Finally, do you have the non-free codecs installed?