If you are new to starling and just learning the ropes, you have likely gone through some of the well known tutorials for the framework including the fantastic series from Adobe’s Hermanth Sharma.
They all demonstrate the use of Texture Packer or Flash CS6 to generate sprite sheets which are later embeded into your project. This is cool if you are bulding your game for one particular platform, but in todays cross-platform demanding world when is that ever the case.

As a result the ‘Embed one massive sprite sheet at run-time’ approach falls on its ass in the real world. Dynamic sprite sheet generation is the solution.
The idea is that you have a script which looks at a swc files contents, finds your movie clips, loops through their frames, scales the content appropriately for your target device, snap shots the bitmap data, then generates a dynamic sprite sheet and XML so that the graphics can be used by Stage3D.

Creating such a system on your own is no easy feat. But as you may know the flash community is notorious for being helpful and sharing.
A gentleman names Emiliano Angelini has been so kind as to provide a library which does what we need.

https://github.com/emibap/Dynamic-Texture-Atlas-Generator

 

He has even provided a working example of the functioning system.
Its good to know how the ‘classic’ sprite generation approach but you will soon find the limitations when you try to embed a 2048×2048 sprite sheet on the iphone3G and scale down the oversized graphics 10x to fit the pathetically small resolution.