Verified answer

Why don't you just create the rounded rectangle actually in flash as it will be a vector; whereas I do believe imported shapes are bitmaps unless you import a specific vector format such as eps.

1. Choose the rectangle tool.

2. In the properties you will see some curved corners, if they are locked (constrained) you need only change one corner using the slider or input box. You can unlock them and have individual values for each corner also.

3. Draw your rectangle.

I don't think you can change the rounded corners after you have drawn the shape; at least not with the properties menu, you can however use the sub-selection tool (white arrow) to manipulate the vector path of any shape, holding down alt whilst moving a point will change the curver profile of a point. Try it.

Draw your rounded rectangle in Flash instead. When you click and drag from Photoshop into flash you are basically copying a raster based graphic (made from pixels) into a program like Flash which uses vector graphics. It's never going to work right!

I guess you could always save your raster image as a png file with transparency in the areas where the white shows at the corners. Then you could insert it into the Flash document. Sounds like too much trouble however.

If you want a vector rounded shape than you can draw it easily in flash, but if you're using a raster shape you can save as either jpeg or flash or even psd and import it into flash

They will become blurry/pixelated if you scale them up in Flash or zoom in (make sure you view your flash document at 100%). Also, if you do not watch your settings, Flash might compress them as JPG, creating compression artifacts that can make it more blurry (not much of a problem for photographs tho). To keep them at perfect sharpness they should be used in their original size (1:1), with no rotation, and the position should also be snapped to whole pixels.

I may be wrong but can't you save the psd file in PS and import it into flash?