If you embed the files in the swf, they'll be available to anyone that cracks open the swf (media files are kept separately from the code).
Streaming the files will help, but once they're fully downloaded, they'll be available in the temp file directory of your browser (you might need to rename the extension, but they're there).
You could possibly try splitting up the mp3 into chunks and playing them one after the other - i think that's what some online stations and video players do - but it's a pain in the ass to set up and get working etc.
You could also maybe try doing some byte magic on the mp3, load it as a ByteArray, then reverse it in the SWF - that way even if they find the file in the temp directory of their browser, it'll be useless - but you lose streaming ability (you need to wait for the full song to download) and you'll need to protect your code to stop the deobfustication being picked apart.
The simplest is probably streaming it, with the swf requesting the urls from php or something.