Also, with H.264 licensing fees a concern for some it's interesting to look at why Macromedia didn't choose it initially; terms settled on later by MPEGLA were .02$ per VOD user, with the first 12 minutes for free, and no licensing fees for internet broadcasters as long as users don't pay for viewing. Tinic Uro's post and comments on H.264 has many interesting details on Flash and MP4.
Update: While MSU compared H.264 codec quality (MainConcept beat other participants) you have to dig to find practicals, so if you're interested in quality Fabio Sonnati has pushed Flash to the limit (reported earlier) with low data rates,
"I use a mix of Ffmpeg, x264, Mencoder and Nero AAC. Here some parameters used: 5 reference frames, 5 B-frames, authomatic B-Frames, B-pyramid enabled, adaptive macroblock type, advanced Trellis on, Subq=7, advanced exagon search, deblocking filter with custom alpha e beta parameter, three pass encoding..."