OK I solved it... and just incase you get any PNG improting issues using this technique... here's a checklist of things to check....
Your asp page seting the <IMG> tag for the flash variable, make sure horizontal and vertical spacing, and the image border are all set to 0.
For some reason flash is stretching my images a little (not crushing as I first thought. I solved this by setting the image height on the ASP page as 3 pixels less than the image should have been. I also had to set the dynamic text box to be 1 pixel higher than the original image. This pretty much solved the resizing issue.
I also offset my text box by -2 pixels for the width and height to remove the border on the left and top.
I hate flash, but this method was perfect for the application required. This is a realy shoddy way of fixing it... but it works, and it seems to work accross all browsers.
Time for a beer..!