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Flash ActionScript Inheritance

So I am trying to figure out the following piece of code:

ActionScript:
  1.  
  2. <pre>in Application.as
  3. import Log;
  4. class Application
  5. {
  6. private var _log:Log; // force mtasc to compile Log.as
  7.  
  8. function Application(createdBy)
  9. {
  10. // Re-assigment of _root to Application instance
  11. createdBy.__proto__ = this.__proto__;
  12. createdBy.__constructor__ = Application;
  13. this = createdBy;
  14.  
  15. setup();
  16. }
  17. public function setup()
  18. {
  19. TRACE("hello world");
  20. }
  21. public static function main(createdBy:MovieClip)
  22. {
  23. var app = new Application(createdBy);
  24. }
  25. }; // end of class</pre>
  26.  

found here:

http://www.osflash.org/pipermail/osflash_osflash.org/2005-August/002165.html

So far I have been recommended to read the following article:

http://www.quantumwave.com/flash/inheritance.html

The article well covers the subject of inheritance in Flash 5 and MX. My only concern is that as the article points out using inheritance in this way it will be only an overload to the application.
..to be continued