LSO or local shared object, introduced in Flash player 6, is like a gigantic cookie; the default size is 100KB. Also known as Flash cookies, they are used to create a customized browsing experience by remembering things such as login, password, or anything else you enter or browse to.
Explanation
A normal LSO can only be accessed from the domain that created them. For example, if www.siteA.com created an LSO, www.siteB.com cannot access it. BUT, a 3rd party LSO can be created which can be accessed by all domains. The default, unfortunately, is to enable LSO and 3rd party LSO.
What to do
Fortunately, you can control how much, if any, LSO experience you want. Just visit the Flash player settings manager and change the settings to your liking. LSO and 3rd party LSO can be disabled for customized per site. Note that you must have at least Flash player 8 to disable 3rd party (shared) LSOs.
3rd party junk file cleaners, such as ccleaner, may delete the settings you changed which means they will revert back to the defaults which is LSO and 3rd party LSO enabled.
Why more people are not aware of LSOs is beyond me.
Resources
You can read about Adobe’s explanation of 3rd party lso and Adobe lso article.
