I’m on Flash CS4 and it seems on a Mac (probably due to a licensing problem) the media encoder won’t accept .wmv. There is extra software you can buy to do a direct convert but there is a free way you can do it with the software that comes on your Mac.
It requires that you have a version of OS X with iMovie HD (I’m on Leopard and it works fine).
Simply start a new project in iMovie, import your .wmv and then go to Share > Share…
Choose Quicktime and then Expert Settings then Share. Now you are essentially converting the file to a .mov which the Flash Media Encoder has no problem with. If you choose Options… and then Settings under video you can choose the setting for the export.
Once you have your .mov file simply encode as normal.