I'll say at the outset that this graphicy stuff is beyond me, but if you move your mouse slowsly you'll see this effect relies on masks, probably dynamic maks, which reveal copies of the text which has been expanded in the horizontal axis (using _xscale probably). Therefore I don't see why you couldn't use a JPG (in an MC) as the basis for the effect, but you'd need code like the original to being with. Checkout flashkit.com/movies/ and earch around for such an effect.
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Jesse Stratford
ActionScript.org Cofounder
Please don't email or PM me Flash questions, that's what the Forums are for!
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