The most obvious problem is that they are re-using the same key and IV for encrypted communications in both directions. This is absolutely fatal for modes like CTR, OFB, GCM, and probably CFB, which are the ones Synergy supports.
Second, they derive the IV from the password, and because of an integer overflow bug, when the length of the password is congruent to its double mod 256, the key and the IV are the same. If the IV were the same size as the output of the hash function they're using (SHA256), you'd be able to recover the key for all passwords longer than 128 characters.
Synergy: Integer Overflow, Key Reuse, IV Reuse | Cryptofails
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