Flash uses vector graphics best -- not bit maps. Start with Illustrator or EPS documents if you have them.
Flash also has a cool 'trace bitmap' feature to create a vector graphic, but it is not very reliable and can produce HUGE files. Be sure to optimize and images after using 'trace bitmap.'
Gifs, JPGs, TIFF or just copying and pasting from photoshop are fine -- they just won't scale well and will be converted to JPEGs by Flash.
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