Altough we are on Actionscript.org, this article is mainly about java, ha-ha :D But do not fear my friend, you will need red5 sooner or later for your flash project.
I created this tutorial on OS X, so there can be difference on other oses.

Download and install red5 v0.6 from here.  ( Using this version is recommended, because there can be big differences between releases ). You will need an Eclipse too. Install both with basic parameters. XMLBuddy also comes handy when editing the configuration xml’s, just copy it under Eclipse/plugins. For flash compiling you should use Adobe Flex 2 as an Eclipse plugin, because in this case you can edit and complie everything in Eclipse under one workspace.

If your os doesn’t have a default JRE or JDK, you have to install one, get one from Sun. In this case you have to play with the java CLASSPATH also, check Sun's pages for os specific howtos.

Okay, let's examine the root folder of Red5, red5.jar contains the red5-related packages, webapps folder is the home for our applications. Jetty servlet container will look for applications inside this folder, searching for configuration xml’s under WEB-INF folders.

We can create a red5 application many ways, we can use apache ant to compile our new application based on red5/build.xml, but it's a little bit complicated. We will use Eclipse to write and compile our application, then start red5.

Start Eclipse, File menuitem-> New Project, choose Java Project, press Next, type Red5FirstApp for Project Name, press Finish.

There is a brand new project in Package Explorer, with a standard JRE system library. Right click to the project, New -> Folder, type WEB-INF. Create a classes and a src folder under WEB-INF .

Right click on WEB-INF/src folder -> Build Path -> Use as Source Folder, and you set WEB-INF/src folder as the root folder of our java sources.

We have to set WEB-INF/classes folder as the output folder for our build. Project menuitem -> Properties -> Java Build Path menuitem -> Source Path tab > Default Output Folder at the bottom -> Choose, and choose WEB-INF/classes.

We are almost ready, only the configuration files are missing from a proper Spring injection.

Start your favourite file manager, change to  red5/doc/templates/myapp/WEB-INF folder, and copy every file from there to EclipseWorkspace/Red5FirstApp/WEB-INF.

Switch back to Eclipse, right click on Red5FirstApp project, choose Refresh, and the four files appear under WEB-INF.