Why use external files? Everything we have done so far seems to be working fine with no problems, so what are the benefits of externalizing content?
For starters, file size is a major factor to anyone serious about developing for the Web. With broadband connections crawling to a few new areas every month, dial-up is still the prevalent bandwidth for Internet users. Keeping content external from the Flash movie will speed the process of loading the Flash file itself because the file will be smaller.
Another benefit of externalizing content is user experience. Imagine going to a car dealership for a specific car, and the salesperson starts telling you about every single model they have. You would lose patience with him for wasting your time and go to a different salesperson, or maybe a different dealership. Well, that's what happens when you give users more than they want. With externalizing content, you can load specific content based on the user's choices instead of loading all the content and overloading the user with information.
When you create a Flash file, and you have all your content in that one file, it will take much longer to load than if you only load content that the user wants. This way, the users can come to your site, get the information important to them, and leave knowing that if they need more content, they can always come back.
So think of loading external files as a content-on-demand service.
Another thing to keep in mind is fresh content. Keeping everything inside Flash means that any time you want to update an image or a section of the Flash file, you have to open the entire file. But if you load pieces from external sources, you only have to update those pieces. For instance, if you like to keep an image of yourself somewhere on your site (I know I do), you may want to update it often. Keeping the image in Flash means that you have to upload the new version of your site every time you want to change the image. But if you load the image into Flash with ActionScript, all you have to do is upload the new image every time you want to make a change.