Stay tuned for more info, we're working on some ways of reducing/monitoring swf file sizes.
I found that using the "Convert to Optimized Graphic" feature caused major bloat to my SWF's. So I do not use that feature anymore. If you have any "optimized graphics" - you can undo them. I reduced a SWF from 4mb to about 1.6mb that way once. I'm not even sure what the supposd benefit of an "optimized grahic" is, I originally used it to change a group of layers to one object in several instances, but found it better to firm up my design more in Photoshop 1st, then flatten layers before bringing PSD into Flash Catalyst. I suppose overall, fewer layers imported makes for smaller SWF's too.
In general, "Convert to Optimized Graphic" is really for taking large amounts of static vector graphics--e.g. a complex icon imported from Illustrator--and compiling them into a single graphic; this improves performance both inside FC and in the running application--it also reduces SWF size slightly, but that's not the primary reason to use it.
From your description, though, it sounds like you mostly have bitmap graphics, in which case "Convert to Optimized Graphic" probably wouldn't give much benefit. However, it shouldn't cause your SWF to get bigger--if that's happening, it's definitely a bug.
Do you have a test case we could look at to see what's causing this problem?