After much trial and error, I finally have a definitive answer. The answer is yes, you can use StageVideo in a Flex Mobile project. To be honest I found StageVideo to be completely useless, at least for what I was hoping to use it for.
The first big problem is that the StageVideo plays underneath all Flash content. Second, at least on iOS, there were no video controls. I suppose you could roll your own, but I didn't take the time to experiemnt with this. I ended up just using StageWebView.
I hope that helps anyone else looking for this.
The link you posted is dead now... do you have any examples you could post on how this is achieved? I've been struggling wit hthis for days now, and still have not found an official solution for playing progressive video on my ipad.