that's a good question,
I've been gibbling around with this for a week
and I'm going to post a tutorial soon (hopefully tonight)
it's all about handeling multiple bytes in Arduino.
but ofcourse if any other advanced user has some tips for us newbies that would be just great! 
in general the C language (and Arduino as far as I know) can't handle strings natively.
in C you can import a string library but you need to do some workarounds in Arduino to set it up.
the basic concept is that a string is an array of single bytes or chars. In the samples I'm preparing there should be reusable functions for this kind of problems. and an Actionscript Class to easily set up a communication between Flash and Arduino.
I'll get back here to give you the url and to let the Arduino masters tell me If I got the right or wrong method. 
l8r
b.