Oman3D has posted a comprehensive tutorial on creating a simple flash lite 1.1 game using Flash 8/CS:
This tutorial will teach you how to create a Flash Lite game playable on the Flash Lite Player version 1.1 - one of the earliest versions and most restricted, but the most widely spread version as well. Our basic game could be created without using the advanced features provided in later versions. Adopting Flash Lite 1.1 will guarantee that the game will be compatible with the largest possible number of Flash Lite powered devices.
For more information on this, please read their tutorial.