Hi Anandat,
Yep, it certainly does support flash banners, I've updated my original post just to clarify this. (thanks)
When creating an xBanner you can choose between, image banners (single image or
image groups with various transition effects), HTML text banners & flash based banners.
If you would like to see the admin area of the mod in action, you can see it demonstrated in our video tutorials:
http://www.thexcartstore.com/Tutorials.html
regards
W.