Well, I can tell you how the alha overlay works with a normal .swf. I'm quite sure that an .swf containing alpha video works the same way, but I'm not entirely sure.
Basically, all you have to do is go to File > Publish Settings... > HTML tab and set the Window Mode to Transparent windowless. This will make your background (so whichever part of the movie that is not covered by graphics/movieclips/flvs/...) transparent.
Now copy the code from the .html file that Flash generated for you and place it inside a div, like so:
[div style="position: absolute; top: 0px; left: 0px; z-index: 10)"] Insert the code that Flash generated here. [/div]
[div][/div] ofcourse, should be replaced by the HTML div tag.
This code essentially places your flash animation in the top left corner of your screen at a z-index of 10. If you're not familiar with 3D, the z-index is basically the third dimension, so in other words, it places it on a layer above the other content.
Hope that made sense... :)
General notice: from now on, I would like to ask everyone to put [AS2] or [AS3] (corresponding to the version of actionscript you are using on your project) in front of their post titles when the question is actionscript related! Please help us help you faster. Thank you.
This is a pretty simple concept that I have spent tons of time trying to figure out.
Make a .swf with a streaming flv that has the alpha channel encoded.
this will create the code you need to paste on your page. You can adjust exactly where you want it on the page.
One of the concepts of over the web is their ability to stay fixed on the screen when the page scrolls. The problem I see is that if they are trying to get away by scrolling and your video follows them...this may annoy them.