This person's experience is completely the opposite of what I've seen on my own N1, though to be honest I don't watch many flash videos on my phone.

Strongbad episodes and casual flash games run perfectly. The small amount of video I have tried seems fine - Youtube via the inline flash player (not launching the separate application) and flash player video porn.

The argument that Jobs was right because flash video sucks on a phone seems silly - weren't we suspecting that flash games were what Apple were trying to keep off their ecosystem?