Quality drop from original MOV to published SWF

Hey all. In-house corporate video guy here who doesn't know an action script if it walked up and shook my hand, so bear with me.

Using Flash Video Encoder to convert my beautiful looking .MOV file to FLV (settings - Flash 8 High Quality, VP6 codec using default setting of 700 kps for max data rate, resizing exactly in half from 720x486 to 360x243, duration approx. 2 mins).

When conversion's done, I open Flash CS3 and marry the FLV I just encoded to a player created by our web guy who's no longer with the company. I hit publish and the result is an okay looking set of files (swf, html), but not crisp like my original MOV.

Am I dreaming or is retaining that original picture quality through all this conversion not possible? Are there simple settings a dope like me can tweak that would make a difference?