Flash developers who are still using ActionScript 1.0 are drastically limiting their capabilities, wasting valuable time and resources. Because most Flash developers come from a nonprogramming background, they don't fully understand the true power and benefits of ActionScript 2.0. This article attempts to clear up some common misconceptions about AS2 and gives some clear examples demonstrating the new concepts and methodologies that can be applied using it.

AS1 Is Not Deprecated
What is now referred to as AS1 is the same AS you'll find in Flash MX. Contrary to popular belief, the AS1 programming style - using prototype objects as classes - is not deprecated. You can still write prototype objects and modify existing objects' prototypes in AS2 using the exact same AS1 syntax. AS2 does not deprecate AS1; it extends and refines it. . . .
Oriiginal article from MX developer's journal