JPEG = Evil
Ow... the graphics on this utterly sucked. I gotta tell you how to fix this. To make a sprite movie properly you need to take the sprites and trace the bitmaps. Trace Bitmap is one of the options in the Flash Menus... I'm not sure where it is at the moment but believe me it's there.
In trace bitmap mode put 1 in the first 2 boxes and many corners in the final box.
Then all of the sprites will be made transparent after you delete the background they were previously on. This is sort of a rough description but please look at some tutorials before you do another sprite movie.
As for the rest of the movie, I enjoyed it. Greta music choices and strange plot.