flash does not have inbuilt mp3 encoder.
if you really want to save to mp3 format, theoretically possible solution is to write an mp3 compressor/encoder using action script.
Flash don't support recording audio as MP3 files, so if you want to record audio using flash in MP3 formats, you probably need to pursuit to other audio convertors or write an available script. Personally, I don't use flash to record audio, but using an audio recorder to record audio from flash video as mp3 files. Perhaps you can have a look at this way.
The .flv format is a "container" format, not a video format.
So that means that inside the container, you can have a video file and/or an audio file or even just an audio file.. which most likely is already an mp3 file. Use something like "FLV Extract" to break open the container and see:
But really, for any Web delivery of audio, the .flv (audio only) method works just fine. Lots of media players available for the Flash .flv file.
Sounds from my bunk on the Lady Washington
Scroll down to third media player.
A little quiet to start with... but this is a .flv file with just an mp3 audio file inside.
Best of luck!