Seconding this. Use x264 (or an application that uses it, like ffmpeg) and make yourself an mp4 video that plays in Flash. Having low quality for a product de

Seconding this. Use x264 (or an application that uses it, like ffmpeg) and make yourself an mp4 video that plays in Flash. Having low quality for a product demonstration video simply isn't tolerable--and yet it's amazing how much people tolerate awful quality internet video despite the fact that one doesn't actually need a lot of bandwidth to achieve reasonable quality. JW Player is of course a great tool, and takes literally 30 seconds to set up. My standard toolchain is ( x264 -> rawvideo + faac or NeroAACEnc -> aac audio ) -> mp4box -> mp4 file. For those who are commandline-phobic, there are many GUIs to streamline the process; for example, MeGUI can produce Flash-compatible H.264 video files with x264. Make sure you're using the latest versions of the encoders as well, especially if you're trying to get away with a much more fancy video than the one in the parent--it's better quality and compression for free. Also remember that Flash supports H.264 all the way up to High Profile, so there's no reason not to use all the features. (aside: above video uses a ~2007 version of the encoder, according to my detection tool)