Flex does indeed compile swfs on the fly from a variety of resources, however
the compiled swf will be in FLash 7 format which unfortunately won't be usable
for Flash Lite.
I would use ming or one of the other products that tom mentions. One that I
like is FlashWriter Toolkit. its just a few php pages, and requires nothing
else installed other than the basic install.
http://www.bronsonbeta.com/oldstuff/ (you just need to go into the flash utils page and change the version byte
from 5 to 4). As shipped, this has some incompatibilities with newer versions
of PHP. Back when I first used it, it worked on 4.07, I can't vouch for later
versions.