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Seems like it's an envelope distortion
Sorry for this post as I get soo busy working in other areas of Flash and realize that all I needed to do was to brush up on shape tweens.
Sorry, I thought I had the answer but I was wrong. This effect was created one of two ways, in Illustrator or After Effects. I have Illustrator CS3 and found out how to export animations as swfs . So in my case I would have to create the text effect and export as an swf (frame by frame animation) but this is where I need help. I cannot find a way to export just a text effect and drop it in an existing fla? Only way I could think of was using loadMovie but there has to be a different way. I went ahead and used a Flash decompiler and opened the swf of the link in the original post with the text effect in it. In the fla the text effect is in a layer with frame by frame animation inside a movieclip on the main timeline. So how did they export an swf of this text effect and get the effect into a movieclip since Illustrator only exports swf's not fla's?
if I'm unclear in my explanation I'd be glad to clarify it.
If it is frame by frame, then sure it is video.
But, there's more "flash way" to it: you break apart the text twice, copy the initial symbol, distort the one on the stage on the first keyframe, paste the original, distort it again in the second keyframe, create third keyframe, paste what you have in the clipboard and distort again. Then create shape tween. It is not envelope distortion like I said at first. Envelope distortion's trickyier, its the "distort" option, you gain access to it after you break apart the text.
I'm guessing it was done in Swish. That's the kind of text effects it's famous for. At any rate it looks like just a typical blur effect to me.
Why would you want to import an fla? You'd normally want to import a swf as a movie clip although you could also import it to a new layer, but the movie clip gives you more options for moving the swf around on the stage. I'm using an ancient version of Flash though, so maybe things are done differently nowadays.