Multiple questions related to the Interactive media server

Can it take a high def digital input from a Tandberg box (SDI or ASI format) directly? Currently we are taking the digital output, converting it to analog, then encoding it to Flash

No, but that doesn't mean you can't stream the output to FMS. what format is the digital output? you may be able to pipe that into a PC, and use a software encoder to push the stram up to FMS.

Does it provide for manual ad insertion and overlays in a live encoding stream?

Yes and no. Assuming your ad content is an audio or video file, you can inject those ads via server side script. Overlays are a bit different... in that case you'd inject actionscript data into the stream, and the client application (the player) would interpret that actionscript message and handle the overlay on the client side. You can't do compositing, you can only do layering on the client side.

Does it allow manual intervention to switch out of the ad to the live stream?

Yes. To accomplish this, you would have an .swf client that provides UI, and sends messages to the FMS application. The stream switching would then be handled using server side script.

What bit rates are supported on the output side? Can it do multi bitrate output from the encoder, say to different ports? Different ports being key.

Theorhetically, any bitrate is supported. As for multi bitrate, it can be done, but each bitrate would be a separate stream (separate publishing stream, separate subscribing stream). You don't need to do this over different ports, streams are channels within the RTMP connection, rather than streams being treated as separate "connections" to the server.

Can you cut clips from an encoded feed? On the face of it, I would presume the answer is no, but I wanted to check with the experts.

Not enirely sure what you mean there. If you mean "can I play back clips from a recorded live stream over a live stream for the audience", or "can I publish several streams to the server, and cut back and forth amongst them to create an output stream for the audience", the answer is yes, through server side actionscript and a client side interface for control.