I don't understand how this is possible. I made this banner based on the design of another one. I've been struggling getting decent quality. I notice the quality is pretty good in the one I'm copying. I decompiled and saw that the images alone are 125kb. This is bizarre because the total size of the swf is only 45kb. What the hell is going on here?
It seems that if the source PNG file is too big (and in this case, even 25 kB seems to be "too big"), Flash decides to use JPG compression on the imported file by default.
The default amount of JPG compression is defined under
The compression can be overridden by–object basis through the
Note that the original PNG is 25 kB and Flash reports its lossless file size as 135.6 kB; it may be the case that Flash will base its calculation to a redrawn bitmap.
This might answer your question — or not. I noticed that a SWF file containing just the PNG image (25 kB) results in a file size of 16 kB. (For what it's worth, a SWF file containing the same PNG image, this time compressed with 97 JPG compression, results in a file size of 20 kB (well, the increase was expected))
So Flash does some abracadabra in between of which I currently have no idea; but changing the default compression to your liking might solve the crippled image quality of your SWF output.