Here are some of the new features in ActionScript 2.0, and why one would want to use it instead of ActionScript 1.0 (yes, you can still use the older syntax in Flash MX 2004).
ActionScript 2.0 is not a new language. It is an enhancement to the previous version, by building on the existing language. In fact, Flash MX 2004 compiles AS2 into AS1 equivalent bytecodes. One reason for this is backwards compatibility in Flash Player 6. As a result, one can code in AS2 and compile it for Flash Player 6. For better optimization, target for Flash Player 22.214.171.124 or higher. Some version 2 components won’t run except in FP7, but some can run in 126.96.36.199 as well.
In terms of building applications, ActionScript 1.0 (and ECMAScript 3 in general) requires getting intimate with something called the prototype (and __proto__ if you’re a rebel trying to avoid unwanted side effects). The reason being that there was no ‘class’ construct, and inheritance was done in a very odd way.
Now in ActionScript 2.0, it is more suitable for OOP because of the following new keywords and features:
class, interface, extends, implements, private, public, dynamic, instrinsic, static, get, set, import; class path (similar to package), and strict data typing (useful in locating problems at compile time).
With these new features in ActionScript 2.0, building robust applications is becoming more attractive, and in a way easier. However, because Flash MX 2004 does not care if AS1 or AS2 is used (in most cases), one can still continue using AS1 and slowly migrate over to AS2.