It's something to do with CPU usage, on my core i7 flash is using 90% CPU.

Maybe you have to look at how often you're updating the screen, I'm not very familiar with ActionScript but it feels like there's a constant loop running as fast as it can, is it possible to use an event based system to update the screen instead?

-- well yeah, its a cpu thing, we may need to lower the kb size on the imgs that made up the sprites, and less fps I guess... we need to do more optimization...