This website does an awesome job of controlling pan and zoom for the main movie:
http://www.thisisactualsize.com/main.html
What I want to do is something similar but also allow for the user to click and drag the larger picture. Just like you can on Google maps. Any hints?
Sorry, I’m a year late! I know, very bad form to bring this message back from the dead!
BUT…
I just wrote an application which does the the whole pan/zoom thing! I was Googling to see if anyone had a different solution to the problem and stumbled upon this post.
You can find my version (with source code!) on http://blog.organa.ca/?p=16
I try to explain the trickier parts of the code in my post too. In case you’re wondering about the math.
Sorry for the shameless self promotion but I already had a Kirupa forum account so I figured I might as well help some people out if they’re ever running a Google search for ‘pan zoom AS3’ 
Peter Organa
Hey! I was searching for that exact term this morning - good work (and timing) sir!