I'm fine with the font size. I wouldn't go any smaller though.
I like your Flash design. Your tag line, "More than just web design," falls flat for me. It diminishes your web design work with the word "just" and doesn't specify the other services you provide.
Also, think about lengthening the hover image in the main Flash space. Right now, it does pull my eye away from the menu but it's too quick for my eye to really register it.