Away3d has just released a new version, Away3dLite.
This release seems to address all the same issues that Atomic was trying to.
Firstly it is written from the ground up for Flash10, making full use of the new features/types, etc. which greatly increases performance, and secondly it has a very small footprint compared to the full engine.
I think it's a shame they dubbed it "Lite" as that suggests it's less powerful than the full version, when in reality it's a good example of 'the less, the more'.
Great release, will start testing ASAP.