Testing Animation - Importing from Photoshop

Thinking about how long it's been since I've done any sort of animation, I decided to play around with some animation with Flash. However this time around, I wanted to test out and see if drawing each frame in Photoshop and importing each image into Flash is a possibility.

It turns out that it is!

...kind of.

First off, here's a short gif of what I did with this technique:

It's nothing too complicated; it simply has a simple character with a poorly drawn background. As I said, everything you see in the gif (except the lines by his head) were all drawn in Photoshop and imported to Flash.

Now here's a screenshot of what happened to this exact same animated scene when I exported it as an .avi file:

what. the. fuq.
Why does that happen? How does that happen?! Keep in mind that the gif and the avi file came from the exact same animated scene with zero alterations when it came to exporting both files. Could it be that it does a crappy job with exporting with imported images in the Flash file? Probably; I haven't found any answers as to why this happens.
If that is the case, that pretty much leaves out any possibility of drawing out frames in Photoshop and then importing them into Flash. That would suck; I was kind of hoping nothing would go wrong in this process.

Oh well. I'm still playing around with this process anyways.