Depending on your prior development experience, Flash Lite 3 will either seem like a step back (if you are more familiar with ActionScript 3.0) or a giant leap forward (if you are more familiar with the pre-ActionScript 2.0 used in Flash Lite 1.x). I think of Flash Lite 3 as Flash Player 7 (using ActionScript 2.0) with just a few limitations described below. However, Flash Lite 3 does support the newer On2 video codec (in addition to the Sorenson Spark codec), so you could also say Flash Lite 3 is similar to Flash Player 8 without some of the features (most notably blend effects and filters). It all depends on how you look at it.
The following list of Flash Player 8 desktop features are not supported when developing Flash Lite 3 projects for the Chumby:
Additionally, there are other features that probably don't apply anyway, such as using LocalConnection and various System.capabilities properties.
The list above is not all-inclusive, but it does provide a good starting point of things to consider when designing your widget. To see a complete list, check out the unsupported and partially supported ActionScript elements section in the Flash Lite 3 online documentation.
Here's all you need to do to prepare a Flash file to develop a Chumby widget.
Select Modify > Document from the main menu. In the Document Properties dialog box, set the stage dimensions to 320 × 240 pixels and set the frame rate to 12 (see Figure 1).

Figure 1. Set the stage dimensions to 320 × 240 and ensure that the frame rate is set to 12 fps
Select File > Publish Settings. In the Flash tab, use the version drop-down menu to select Flash Lite 3.0. By making this selection, you ensure that the movie's ActionScript version is set to ActionScript 2.0. Additionally, this setting causes Adobe Device Central to launch whenever you select Control > Test Movie (see Figure 2).

Figure 2 . Choose Flash Lite 3.0 from the version drop-down menu in the Publish Settings dialog box
If you haven't already, be sure to download and install the recent update for Flash CS3 Professional. If you haven't yet installed it, you won't be able to select Flash Lite 3.0 from the version drop-down menu in the Publish Settings dialog box.
Also, be sure to check out the Chumby profile for Device Central created by Scott Janousek. You can download and install the profile to see your project emulated in Device Central using the Chumby specifications.
The main purpose of setting the version to Flash Lite 3.0 is to ensure you receive warnings about any unsupported functionality you might attempt to use when you publish the movie. Additionally, when you use this setting, various unsupported features (such as blend modes and line cap styles) will be disabled as you edit the file in the Flash CS3 authoring environment.