Importing images into Flash

Once a year - I attempt to make a Flash movie- for the holidays, to spread warm happy thoughts to people all around. If they only knew-most of my hair loss is the same time of year.

I have updated to Flash 8 and have imported a graphic for my background.The photoshop file saved as a jpg made the smallest size file. Yet I remember reading somewhere that png files might be bigger but compress better?

I cant upload my Flash file for veiwing because it exceeds the 1mg limit- even zipped. I am thinking that it is my background image. I only have six files in the library.

Ah, and the question- what is the best file format for a graphic to be imported into Flash? (I have lots of issues but will start there)

I have had success with my file and want t thank all the other threads for the help.