Ok, First of all have you ever seen a Hentai Quiz game or a shitty Gallery with the pictures all blown up or shrunken down to fit on screen. It looks all shitty and pixelated! This is easily fixed.

Step one:
drag your image into flash.
It should be in the library.

Step two:
Right Click the image in the library and click properties.

Step three:
Check off "Allow Smoothing".
Instantly you should see a difference.

Optional Step:
To Really make the image looks it's best. Set the compression to "Lossless PNG/GIF". However, it maybe better to simply set JPEG quality to 100 in some cases.

And that's how you make Bitmaps in Flash look less shitty...
Now "Allow Smoothing" is can cause major slowdown, so use it wisely.
Also another Alternative is setting the stage quality to "BEST".

AS2:
_root._quality = "BEST";
AS3:
stage.quality = "BEST";

Now go make me proud!

Here's another related tip:

If you save JPG images externally (outside of flash) as non-progressive JPG files and then import them into flash they will be tagged with "Use imported quality" (they will not be recompressed when you export the flash file).

This is useful if you were to make a flash file with say 200 images, you can simply select all the images in windows and check how much space they take (when imported into Flash the swf file will grow with at max that amount, could be less if you enable compression upon export of your swf - mening adding ZIP compression to the whole swf file not compression to each image).