Hi. We're considering using flash in our implementation of a web
service. Before we head down this path, especially since we'll be
using a complex method of server updates to continually show different
"scenes" in the flash movie, we would like to know what is the
penetration of flash. We're considering Flash 5 or 6, but would be
interested to see how deep flash 7 goes as well.

The answer I'm looking for, breaks down the penetration:
1. Across Versions 
2. Across Browsers
3. Recent Stats
4. 3rd party

We've already found Macromedia's own study
(http://www.macromedia.com/software/player_census/flashplayer/version_penetration.html)
and are looking for something third party.

Many thanks in advance.

Hi.
The Macromedia study you found is actually a 3rd party study and was
not done by Macromedia themselves.  In a way you have answered your
own question.

Unfortunately you wont find too many flash only studies.  You will
however find a lot of browser statistic studies and they can be turned
into useful information.  For instance, after version 4 of internet
explorer, all versions came packaged with the flash plugin.  Based on
browser studies you can see which percentage of people will likely
have the flash plugin installed.

Another good indication of the penetration of flash is the use of
flash advertisments by Microsoft themselves.  They use it fairly
consistently for other animated displays on their website too...

Also, it seems you are under a misconception.  Flash is backward
compatible (to an extent).  This means that you can develop in Flash 7
(or 8 is now the latest version) and have your animations still able
to be viewed by users with earlier versions of the flash player.  If
you are even more concerned, you can specify when publishing your
flash as to which version you would like it to be compatible with.

My advice is to develop with the newest version of flash you can get
and if you are concerned with compatibility, then publish for an
earlier version.

Hope this helps.

This link may also help...

http://answers.google.com/answers/threadview?id=561724