That was really nice. And the music fitted flash just fine for me, no problems. It synced nice. Anyway I think you should add a preloader. You can find them here:
Marvellous man! I love it. Even though it is devoid of any meaningful story, the art is wonderful and you gotta' love the tune. Full 5 mark for you!
Man, let's play that again :)
This kind of thing isn't exactly my cup of tea - I like 'em longer and with more of a story - but it looked great, and the music really complemented the visual style. Speaking of the sound, I can't be sure that it's synced up just exactly as you intended, but even after reading your edit about the music lagging behind the video, I couldn't spot said problem at all. Everything seemed to fit just fine as far as I could tell.
The two parts are looped together perfectly (at least, on my machine). The pausing is likely an issue I've come across in Flash before where abruptly stopping/starting/skipping through a movieclip with synchronized sound causes the Flash player to temporarily lose track of time, and cause pauses. There's nothing you can do about that, though it seems for the latest Flash plugin it's not an issue anymore.