quality
So if you want to embed a video, make sure the flash framerate, the flash video frame rate and the rendered movie from after effects frame rate are the same (European = 25fps, American = 29,97 (or 30)).
Make sure your video is at least 350kbps. Make the video size as big as you like (max is what newgrounds supports offcourse). As long as it's under 10 mb, Offcourse if the movie is really short, you might want to consider to not let people load 10mb for just a few seconds of animation.
If you take a look at my movies, you'll see that all of them are embedded videos! But it's really hard to see at most of them. I like to animate with a combination of flash, after effects, photoshop and cinema 4d. Flash shouldn't be your limitation :P
Well good luck on your next movie! Looking forward to see more.
Regards