Oops, should have checked back in here sooner! I did indeed find that bloginfo('template_directory') works. There are some depricated tags though, so it makes a it a bit confusing when you find older sollutions on other sites...
Thanks anyway for all the replies!
@t31os: I don't think a relative path works in this case because of how WP includes your template files. I think.
even though to your index.php file your images folder is in the same place, when you target an image in that folder using something like images/myphoto.jpg it won't work.
By the way, is this all I need to do in order to successfully embed Flash? Or are there some other things I need to be aware of?
I'm a total noob to WP, but I know my way around PHP ok.