Dessolving words:

Step 1:
Type the text you're gonna dissolve on it's own separate layer. It's good to name this layer so you don't get it confused with other stuff in your movie.

Step 2:
Convert your text into a movie clip symbol. Either click Insert> Convert to Symbol, or press F8. Name it something like "dissolve". Double click on it's name in the Library (Ctrl-L) to edit it.

Step 3:
Okay, in your symbol's timeline, create a number of layers equal to the number of letters in the to-be-dissolved word. Name these according to the letters. Check out Figure 1.1.

Figure 1.1

Step 4:
Select your word and break it apart. Ctrl-B.

Step 5:
Okay, now select the first letter in your word. This would be the "D" in my example. Press F8 to convert to symbol. Name it something like "letter_d". Cut it from the layer and paste it into it's corresponding layer. Use Ctrl-Shift-V to do this, so it will paste into place.

Guidelines for this:
Zoom in a little bit. It's important you select the whole letter, and this usually makes it easier.
You may have repeating letters, such as the "ss" in "dissolving". You'll need to name the second letter "letter_s2".(Or something like that.)

Step 6:
Okay, back with me now? You should have each letter on its own separate layer. Should look something like Figure 1.2.

Figure 1.2

Step 7:
Now, all depending on how fast you want your word to dissolve, create a frame on all of the layers. I did it on frame 40. This shows on Figure 1.2 also. Check it out.

Note: An easy way to do this is to select the desired frame on your top layer, hold down Shift, and select it on your bottom layer. This selects across all layers.

Step 8:
This is where your creative instincts come in. Start with your first letter. Move it away from your word, scale it some, rotate it some, and change the Alpha to 0%. There's a lot of possibilities here, so do whatever you feel like. Do this to all of your letters. My beautiful example is Figure 1.3.

Figure 1.3

Step 9:
I said "Let there be motion." and there was. Select a frame somewhere between the start and ending frames of your top layer. Hold down Shift and do the same to all of your layers. Check Figure 1.4. Click Insert> Create Motion Tween.

Figure 1.4

Step 10:
So beautiful it brings a tear to my eye. Drag your time slider back and forth to view your handiwork. Don't like it? Undo a few times and try again.