A Sprite Object is a Simple Object that has its own Timeline and is a collection of Objects with Effects. They are the equivalent of 'Movie Clips' in Flash. By default, a Sprite is also a Scripting Object.
Since a Sprite's Timeline is played independently from that of the main Movie, you can think of it as a piece of reusable animation inside the main Movie.
A Sprite Object can contain any type of Object, including other Sprite Objects.
You can also create an animated button by using a Sprite Object in the Up, Over and Down button states. See the Tutorial section to see how to create animated buttons.
You can create an empty Sprite using 
Insert Sprite, or convert an Object into a Sprite using 
Convert to Sprite or 
Group as Sprite. You can also produce Sprites by importing an animated .gif or a .swf Movie.
You can change the content of a Sprite when the Movie is playing using the Load Movie Action.
You can edit the settings for a Sprite Object using the Sprite Panel.
A Sprite is a Scripting Object and can consequently be referenced by other Scripting Objects. However, Sprites that have Mouse Events or are inside a Button State cannot act as targets, even if they have a name. Also Sprites that are within an unnamed Sprite or a Group can only be referred to from within the Sprite itself (i.e. from one of the Objects inside the Sprite).