Usually I would say mp4 (h264+AAC or h264+mp3)
do some testing for the encoding with ffmpeg
and play it with StageVideo.
in details ...
See the doc on StageVideo
The video displayed by the StageVideo object always appears in a rectangular area on the stage behind all Flash display list objects. Therefore, the StageVideo object takes advantage of hardware acceleration while supporting the most common case for displaying video: a rectangular display area overlaid with video controls.
The benefits to using a StageVideo object instead of the Video object are:
- Improved video display performance because of using hardware acceleration.
- Decreased CPU usage.
- Flexibility and creativity for development of content, such as video controls, that appears in front of the StageVideo object.
also see doc for NetStream
Adobe AIR and Flash Player 188.8.131.52 and later versions support files derived from the standard MPEG-4 container format. These files include F4V, MP4, M4A, MOV, MP4V, 3GP, and 3G2 if they contain H.264 video, HEAAC v2 encoded audio, or both. H.264 delivers higher quality video at lower bit rates when compared to the same encoding profile in Sorenson or On2. AAC is a standard audio format defined in the MPEG-4 video standard. HE-AAC v2 is an extension of AAC that uses Spectral Band Replication (SBR) and Parametric Stereo (PS) techniques to increase coding efficiency at low bit rates.
Exploring Flash Player support for high-definition H.264 video and AAC audio
it will explain a lot of thing about formats, encoding, etc.
also Understanding video formats and Simple Mobile Video Encoding Recommendations for Flash Player and AIR, then reuse what you have learned with FFmpeg H.264 Video Encoding Guide.
finally in the ActionScript 3.0 Developer’s Guide
Rich Media Content
Working with video
Using the StageVideo class for hardware accelerated presentation
from that point you should be "all set"
And if you want to go into extreme details
Video Encoding Cookbook and Profile Guidelines for the Adobe Flash Platform
Video compression is indeed both an art form and a highly technical process. Many compressionists and website developers responsible for preparing video for web delivery today don’t fully understand the details behind the settings in their encoding software; these details are often hard to find and are often only discussed in scholarly technical papers.
This comprehensive technical whitepaper is intended as a reference guide for those whose aim it is to improve the overall quality of their encoded video, producing the very best quality possible. Best practices, quality control testing techniques, and specific encoding considerations for delivery on the Flash Platform are discussed. While highly technical in nature, it is meant to introduce advanced encoding techniques to those who may not adequately understand what is happening "behind the UI" in their compression software, providing greater insight into the encoding process — and ultimately helping to deliver the very best playback experience.
The white paper Video Encoding Cookbook and Profile Guidelines for the Adobe Flash Platform (PDF) is a top notch reference.