I did a test, embedding an AS3 pano from Pano2VR, into an AS3 SWF of my own. I turned off all the options that degrade the quality when the pano is moving - so it should stay anti-aliased and smooth, even when moving.
This all looks fine when I run the pano SWF on its own - it looks smooth when moving. BUT when I run it embedded inside my own SWF, suddenly, it lowers the quality when it moves -- it looks like Flash's rendering quality is lowered. It goes smooth again when it stops moving.
I've double checked that there is nothing in my SWF or the host HTML page which is doing this... so could it be a glitch in Pano2VR's AS3 version? I repeated the test in the AS2 version, and it works fine...