portable network graphics (png) from my little bit of experiance with flash. it preserves the alpha transparency very well.
vector, small size, crisp look... in FLASH CS3, you can easily import ai files, and if they contain vector symbols, the file size of the compiled swf will be very small.
PNG if the clearest quality over the other formats (except for vector). However, vector will give you the smooth lines when people zoom into your flash image.
Yes, there is a preferred format, ai. FLash CS3 can import ai files preserving layers and gradients/masks as well as glow, drop shadow bevel and other filters.
Is Adobe Illustrator the best or only way to create ai format files, or is it now a standard that other programs use as well, for example corel draw?
PNG are great if you need the transperancy. If you don't need it, a medium size jpeg will keep our file size smaller. go to graphicdesignrx.com if you would like to suggest a tutorial