Question: What's the difference between a graphic and a movie clip?
Answer: The basic difference between a movie clip and a graphic is that a graphic is a static object, while a movie clip is not. When you're working in Flash, a graphic symbol may look like it has its own timeline, but when you publish it acts as a single static image in Flash. Nothing you do on additional frames really shows unless you do some rather odd tweaking with ActionScripts, while movie clip symbols are designed to play like little mini Flash movies all their own inside your main SWF. Movie clips also have more ActionScripts that can be applied to them.
In addition, in Flash 8, you can use filters on movie clips. You can't on graphic symbols.
