So I have created a randomly generated terrain for a lander game. It does overhangs and gives a pretty good result. I still have some artifacts, as can be seen in the screenshot. They have more to do with identifying the right tiles for the generated terrain than anything else.
The spaceship is animated and the flame out the exhaust is animated. The moon in the background moves and the gradient is on top of the moon and background. It is nothing special so far, but was fun to get to this point. I am looking to port this to either Flixel or Flashpunk. I still need to decide. I have my own physics, but for this I am thinking of learning Box2D with Flashpunk or trying to see how Flixel does things. Not sure yet. I will make update posts as things progress.