Transparency support in Flash

Removing the background of imported bitmaps
While its possible to import bitmaps with transparent backgrounds into Flash, you can also remove the background after the image has been import. This technique is often useful.

To remove the background for raster images do the following:
1 Use File > Import to bring the bitmap into your Flash movie.

Select the image.

3 Choose Modify > Break Apart.
4 Deselect the image.
5 Select the Lasso Tool.
6 Click on the Magic wand.
7 Select the background (usually white) area of the bitmap image.
8 Hit the Delete key.
9 Convert the remaining part of the image to a graphic or movie clip symbol.

From Macromedia support site  Dec/2003