Yep, it's easily do-able with images and html because images are parsed in a different way. (You can use CSS to change the opacity of an image). However when working with flash the opacity of the flash object can not be changed at runtime.
With an image you would just use
the normal method. And mix it with a little javascript, but if you try that with flash it doesn't work.
Hence, the only way to do it(effectively) is to make your entire thumbnails/holder in flash.
Cheers,
Jamey