While creating my last post (engaging and funny Pringles ad! - must see), I faced an issue of how to embed flash files properly in blogspot. The menu buttons when you create your blog post only support image or video, but it is not impossible to embed flash files.
Two easy steps to embed flash (SWF files):
1. Host your SWF files somewhere - I uploaded mine in Google Pages.Take note of the URL of your SWF file. You'll need it. (As example, mine is at http://donelle.gan.googlepages.com/blankCanBeBlank.swf)
2. Edit the HTML in your blog to embed - You'll see that right to the left of Compose, there's an "Edit Html" tab. Click that and put the following code:
Change the URL to your own SWF file location, and change the width and height as needed.
That's it!