Flash applies antialiasing to fonts. This helps large fonts look smooth and unjagged. This makes small fonts look blurry. There are three solutions to your problem.

1) Do as the other poster said and find fonts that work at small size.

2) Create images of small fonts in a photo editor and import images into flash. The image will look the same unless you use to much compression.

3) Tick the box that says "Device Fonts". This means flash applies no formatting or antialiasing to the text. When using device fonts flash lets the web browser render the fonts. The only problem you will run into is that now that flash no longer has control of the fonts your text may appear slightly different in different browsers. Device fonts also help to keep your flash files very small since it doesn't import any fonts to render them in the swf.

I have used all three in different situations. It really depends on what your doing as to which one will work best.