One of the things exposed to at SXSW was an early look at the next update to Flash Video.
What I understood Nick Hippe, the Macromedia rep on this panel, to say is that new version of Flash Video will not rely on Sorenson as its compression partner. They wouldn’t/couldn’t talk about who the new codec was going to be (forward looking statements were nowhere to be found on any of the panels) but the beta they showed was impressive.
Biggest plus I saw was the addition of an alpha channel in Flash Video that the authoring program could manipulate in real time. That opens up a whole new realm of possibilities.
A smaller, but still important, issue the new release is supposed to help the audio/video sync issues which many have found frustrating in longer Flash Video segments.
Hopefully this upgrade will arrive late 05, though no promises on delivery date.