I too struck on the same luckily i saw your reply.
Yay! Found the answer by pure luck and after being so close to giving up!!!
I thought I'd post it here to help anyone else (namely newbs like me) out.
(Remember this is for solidly outlined pngs and not for gradient or blurred pngs)
I am frickin tired! Must... fight... sleep... mind... over... matter... sleep... not... a... mandatory... physiological... function... need... decent... cappachino... no... too... late... zzzzzzzzzzzzzzzzzzzzz!
n Flash 8 it's as follows:
1. Import your image to the stage (Ctrl+R). 2. Select your imported bitmap. 3. Go to the Modify menu -> Bitmap -> Trace bitmap. 4. Depending on how much detail you want, change around the options. If you want full detail use this: a) Color threshold: 1 b) Minimum area: 1 c) Curve fit: Very Smooth d) Corner threshold: Many Corners 5. It will probably take a bit if it's too detailed, once it's finished, it'll be turned into a Shape. 6. Select either the black or white bits of the image (just click on them) and delete them. 7. Voilá, you have a Shape that you can now use as a mask.