It is a 5 frame animation with another low-opacity "highlight" animation on top of it to better give the illusion of a seamless loop.
pretty simple, tho the hard part is finding good, steady footage...
They (Eric) talk(s) about it in thier next book regarding FlashMX & FlashMX Communication Server.
Israel "Izzy" Long
Motion and Title Design for Broadcast-Film-DS
izzylong.com