When it comes to making application i have no idea how these things work.. I leave it to you guys
BUT what could be done with timeline animation is endless specially if there was away to get WM to call frames from within the movie or likewise get flash to call WM events
You can do things like 5 digit codes on an alarm keypad without any heavy coding
Also there is a free program called liveswif than can do Flash swf's all be it only AS1
I normally do Flash games with Lassie but the next version needs Flash CS3 which i can't really justify the expense