Very Nice
You almost went too far with interface toys, but nice work, all the same.
However, there's still a little room for improvement with the physics. You have gravity working well, but there's no inertia, and worse yet, no friction. When I first started in tutorials, I got my little character zinging across the screen from right to left at an incredible speed, and he didn't seem inclined to stop.
It also would make sense if you could cause your charater to drift very slightly to the left or the right with the arrow keys even if you aren't flapping your arms.
Ceautiful work with the ActionScript in this piece. I never played with the .mp3's, but I presume that you are implementing the NetStream object. Frankly, I was surprised that you can set a local path from inside the plug-in, given how rigourous the sanboxing is in Flash.
Nice work with the shared Object component as well. Your ActionScripting skills are top notch. I say this as someone who makes his living building Flash apps.