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Flash movies are also very nice, especially the better quality ones (not the youtube style super crap encoding). Some of the mainstream movie trailers in flash are darn impressive, super quality
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I have been wrestling with that very thing for two days now. Its making me crazy, but i think there is light at the end of the tunnel. It seems to be a trade off with screen size, bit rate, and audio quality. All to make sure it can work really fast and still look great. With WMV, the encoding learning curve is easier because it is easy to right click and see what others have done before you. With flash, you can't do that, so there is a lot of trial and error involved. Mostly error....lol