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flash files become very large when graphics are imported
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Not true. I'd suggest using Freworks to 'optimize' bitmaps and then import to flash. Bitmaps can really enhance a web presentation - there's no reason thery can't be a few k in size. Also too many vector elements in Flash can slow the processor and even cause freezing. Sure, they are small in size, but vector calculation really chews into a processor e.g I'm using a new mac G4 1.4G processor and I still have to design elements on the stage not to overload the processor and slow down the intended frame rate.
To the main question of this sticky. It's not a real conundrum - it's like asking if apples are better than oranges on a table. Why not use both - html and flash. People love Flash, they also like static images, they like plain html text etc. So give em apples, oranges and throw in some pears!
As for SEO - my site scores first 10 rankings on Google, Yahoo and MSN. None of them have seemed to regard flash as detrimental to their database results.
It's not common sense to use one and not the other. Flexibility is the key to success - don't weigh yourself down.