Questions about making multiplayer games

Hi everyone!
I have long since I tried www.habbohotell.com, how would I make something like this? it uses Shockwave I think, what is Shockwave?

I thought that I could have everything work just with like a MySQL database, and just storing all the X and Y positions, but maybe that wouldn’t work, where should I start? I control flash,AS and PHP, do I have to learn anything more?

Thank you all!