Importing PSD images?

In Photoshop CS3 I have masked out the background around a photo of a person and saved it as a 72dpi, RGB, PSD file. When I bring it into my Flash file (I want to retain the transparent background around the person), the color shifts in the PSD file and looks washed out.

What is the best way to bring in a Photoshop image that has a transparent background? Also, by leaving the image as a PSD file, instead of a JPEG, will it add considerable file size to my final SWF?