Anyone who has tried to W3C validate a page with the default output from Flash knows you get a slew of errors.
Here’s a great article on modifying your <object> and <embed> tags so that your pages will validate.
Flash Satay: Embedding Flash While Supporting Standards by Drew McLellan
Here’s a quick example that you can run with that includes the markup for a transparent background:
<object type="application/x-shockwave-flash" width="368" height="201" data="icms_art/nbir5.hdr.anim.swf">
<param name="allowScriptAccess" value="sameDomain" />
<param name="allowFullScreen" value="false" />
<param name="movie" value="icms_art/nbir5.hdr.anim.swf" />
<param name="quality" value="high" />
<param name="wmode" value="transparent" />
</object>