I want to provide streaming flash to my clients that simply plays a
small video (30 seconds) and then allows the client to click on the
movie to take them to another location in the site. I want to know if
I need the flash communication server or is there another way? What
are the pros and cons of using the flash server compared to other
solutions? For what I need, what do you suggest? With the new price of
the server for 100 connections ($4,500), are the benefits worth it?

With Flash 8 and conversion of your movie to a .FLV FlashVideo file.
You do not need any special streaming server or software. Flash is the
best of all stremaing solutions out there as there are no additional
requirements other than the very common flash player and a browser.
There are also a ton of "players" available to make your movie play
and rewind.

I would not purchase a flash server solution but rather a strong
hosting solution costing no more than $200 a month should handle your
load requirements.

I build these all the time for clients.
www.billebert.com

Macromedia claims their server streaming improves the stream, so this
is not the case?

There are two ways to "stream" flash video.

1. Progressive Download
This is the method billebert is referring to and is the least
expensive method. You can store your .flv file on a regular web
server. When the video is requested, it is transferred via the
standard HTTP. One potential drawback of this method is that the video
is cached in the end-users browser. If your client is worried about
protecting the video from being copied, then this solution may not be
viable.
ADVANTAGES 
- no special server required
- starts playing as its being downloaded
DISADVANTAGES 
- cached on end-users computer
- cannot jump to points later in the video until it is completely downloaded
- cannot handle large loads

2. Streaming with Flash Media Server
This method requires Flash Media Server (formerly Flash Communication
Server) which, as you already stated, can be quite expensive. This
solution was intended for delivering video to many users at once. If
you had 100 connections using the Progressive Download method, your
web server would probably melt down. The Flash Media Server is a
dedicated solution that can handle the load. It is also easily
expandable through Edge servers for those times when you expect
super-high loads (e.g Super Bowl commercials right after the Super
Bowl).
Flash Media Server uses the RTMP transfer protocol instead of HTTP.
RTMP is better suited to streaming information and ensures that
stream-ripping programs cannot rip the media. However, there are some
cases where RTMP is blocked by firewalls. To get around this, it is
possible to use HTTP tunneling with Flash Media Server.
There are many additional features to Flash Media Server such as
Automatic Bandwidth Detection, Dynamic Buffering, Playlist and
Ad-Insertion Support, logging, etc. I'd recommend checking out Adobe's
website for more information.
ADVANTAGES
- true streaming (no browser cache)
- jump to any point in the stream
DISADVANTAGES
- expensive
- expect to have dedicated hardware
- possible firewall issues

If you are not expecting heavy traffic to your video, and you don't
mind having a cached copy on your visitor's browser, then Progressive
Download is definitely the way to go.
If you are expecting heavy traffic, and security is a concern, then
Flash Media Server is the way to go. Flash Media Server is expensive,
but there are many third-party hosting solutions available starting as
low as $10 per month.


One final alternative is to just embed your video inside a flash .swf
file. This is probably the most straight-forward to implement, but is
not "streaming".
1. Open Flash
2. Import Video (Wizard)
3. Publish Flash .swf
4. Embed Flash .swf in HTML
This method is very similar to Progressive Download, except you don't
have to deal with an extra .flv file.
ADVANTAGES
- simple to implement
DISADVANTAGES
- not streaming (entire video needs to be downloaded before you can
jump to specific points)
- cached in user's browser

Flash Video MX is a very easy-to-use yet professional software tool to
convert your video to flash (movie to flash, mpeg to flash, avi to
flash, wmv to flash) that can be played on Internet Explorer with high
quality. It supports almost all types of source video files such as
mpeg, avi, mpg, wmv, rm, rmvb, mov and so on, and can generate flash
7,8 video output, then get the flash on your web. With Flash Video MX,
you can add special effects, movie beginning and movie end, edit video
quality, frame rate, zoom scale and audio effect, and even replace the
original audio with your favorite music to make flash! Convert video
to flash is just a few clicks! Flash Video MX is also a good flv
encoder, flash video encoder.
The Flash Video Batch Encoder is a professional tool in Flash Video
MX, which is used to convert multiple video files at once. With the
Flash Video Batch Encoder, you can select a list of video files and
specify their encoding settings, then encode them at once by a single
hit of a button.

have a look at http://www.flash-video-mx.com

go to www.digitaluweb.com. They are group of multimedia developers and
programmers. They might help you. You can email them at
info@digitaluweb.com