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What encoding method (ie On2 VP6, Sorenson, or FFMpeg) are you using? What are the vid dimensions and bit rates you are currently encoding at?
Doing this correctly, Flash will look excellent at lower bitrates than a comparative WMV file - for anything non-HD.
If you want HD you will need to encode to F4V (basically H.264, as previously mentioned), not FLV.
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