My compromise between smaller file size and higher quality video is to generally use the following settings for producing Flash files. I try to find the lowest quality with acceptable fidelity to produce a smaller file (which means it takes less time to load and play).
- Colors: 16-bit
- JPEG Compression: 65%
- Frame Rate: 1 or 5/sec
- Audio: MP3, 11.025kHz, mono, 16kBits/s