flash degrading jpegs

from my own limited experience using flash i have discovered, like many people that flash badly degrades jpegs if they are scaled up or down in flash. Jpegs used at the same scale as they are expected to display are fine but go and scale one up in flash and it's quite raggedy. So what I'm wondering is. In making a flaSH PANO one is obviously using stitched jpegs, that's fine as long as the pano is not scaled up or down. But one of the benefits of panos is being able to explore it in 360 or by zooming in for more detail and panning the view in more detail. How is flash handling this? In QT, zooming in or out has no effect on the quality of the jpeg ( until of course you zoom past the 100% and then as you would expect , it degrades ). In a flash pano you can set the default scale and make your source jpeg to that scale and it will display perfectly but if you zoom out or in past that default scale is the source jpeg not going to degrade?
Peter