Besides Alpha effects on Symbols, there are two top-level transparency issues in Flash. The first is the possibility of making Flash Movies transparent with respect to the hosting web browser. The second is recognizing transparency in imported raster images.

As of this writing, the opinion here is that transparent Flash movies are not possible as they only work in Microsoft Internet Explorer on Windows machines. This news comes from Macromedia TechNote 14201 and 12804.

Transparency in raster images has been conditionally supported in Flash since version 3.x. Problems arise when movies run in a 16-bit color display with PNG files (with gradients fading to transparent) or when there is differing background and index colors in GIF files. This news comes from Macromedia TechNote 13524 and 12804.