Rafat Ali says Flash 8 is on the way with enhanced video capabilities:

Macromedia plans to unveil its Flash 8 software early next month with an emphasis on enhanced video capabilities that some think could become a strong alternative to the present trinity in the market. The company has promised big changes in Flash 8, and many of them center on its video capabilities. Flash 8 boasts a new codec, On2 Technologies’ VP6, that it claim will provide dramatically improved quality over the Flash 7 video codec. Flash 8 also supports alpha transparency, which lets authors combine Flash video with text, vector graphics and other Flash elements. Also, as always, Flash’s cross-platform appeal…

Full article on Flash 8.