It would be easier to help you if you explained the way you've created your movie clip or upload your fla file here
But actually, if you wanna create a rotating object, the easiest way to do this is to add an event listener for ENTER_FRAME event to your object and add some degrees to this object's rotation property every frame
Yes. In your library, right-click the lyricforge_rec2.png image and go to properties. Under compression choose Lossless, and check Allow Smoothing. This will do the trick.
But I see the problem with rotation. When it reaches the last frame it stops for a while and then starts to rotate again.