I worked on many websites, have been on many websites, and I always saw the drop down menus go under Flash animations. This is because by default Flash animations use a separate window (for good technical reasons.) As such they are in a window in front of the drop down widget which is in the main window of the browser.

Yet today (Mar 23, 2010), I found a website, tagged.com (which otherwise sucks), that was capable of getting its drop down menus in front of the Flash animation. So I had to search how that is done. Well... their system used code something like 10 levels deep before loading menu code from Yahoo!. That was compressed so I could not find the answer readily. Too bad!

So... what is the answer to that problem?! There has been a new feature for newer versions of the Flash player (not too sure since when, probably version 7 or 8,) and the new feature is to allow the background of the Flash animation to go transparent. That is done with the wmode parameter of your <embed> tag.

Voila! As you can see on this page, the drop down menu works perfectly!

Note that this works with opaque or transparent. The result is certainly obvious, when wmode is set to transparent, the Flash background color is ignored and made 100% transparent instead.