if you have flash 8 software by yourside, it'll be easier, open up your software...

open new doc...
go to file --> import --> select your flv /movie file
go through the simple step by step inside
and you can choose the skin of what type of 'player' you want it to be

when you're done...save the file...
go to file-->publish
and upload both the .swf (2 file) and html (1 html) to your favourite web server space

import to stage or library is the same, either way the library will have the file

if you choose progressive download from web server...it will create an external flv file for you and link from there...means you'll have 4 files...1 html....1 swf....another swf is the flv player's skin...1 flv is the video

the last question : yes, its best to edit it in after effects