I don't have Flash installed on this computer, so I haven't had a chance to test this, but...
You may be able to accomplish this by writing the text then going to "Modify" and "Break Apart." This will allow you to manipulate the letters individually. If you already have an arc drawn in one layer, you can snap each of the letters in your text to that arc. From there, you could rotate the letters or leave them alone. Once you're done, just hide or delete the layer with the arc and that's it!
I prefer to stay away from images as much as possible.
Kevin