The Playback options control the settings of the QuickTime player when the movie loads, setting it to loop or not, determining whether it auto-starts or is paused at the start, and determining if it plays every frame or drops some frames.
Checking File Flatten will completely composite all movie and Flash objects inside the Flash file into a single movie; otherwise, any movie files in the library will still remain separate and will be referenced from inside the exported QuickTime movie as external objects.
