Campaign Monitor ran a test and none of the email clients tested displayed either the Flash or alternate content except Mac Mail, which did play the Flash movie. Further, Outlook 2003 and Outlook Express displayed an ActiveX security warning that had to be clicked prior to loading the message. After being clicked, neither the Flash nor the alternate content displayed.
Test in the browsers first and validate your code (as much as possible). If it works in Firefox and Internet Explorer, it will probably work in Outlook, Yahoo! and Google Mail. IE 6 is a good proxy for Outlook 2003.
Next, I test in actual email clients. I have accounts with Gmail, Hotmail, Yahoo!, Outlook Express, etc. And I wrote a simple emailer, so other people can test theirs too!