One of the posters gave the example of papercritters.com as a fun flash site. I went to try it out. It didn't work as advertised. I stuck stuff on and drew and they didnt show up in preview. I couldnt find anywhere to shut off the annoying sound. As a time waster it was pretty damn boring.
But here is the point. Informational sites for the most part should NOT use flash. I think this is a usability issue. I want to get information quickly and easily. And when I need that information on my iPhone it's usually when I'm out on the street and have only Edge. For that, web apps like weather, stocks, and google maps are great. The new "locate" feature along with google maps search is probably the most useful addition to the iPhone yet (I live in NYC so don't need GPS but I do need to know where a bank or post office or fedex branch is near where I am at a given moment). Web sites modified to work snappily on an iPhone are my favorite - digg, bbc news, etc.
In general, I see flash's only value is in multimedia entertainment. I rarely go to websites for entertainment even on a full computer. But if I want entertainment on the iPhone I have video, podcasts and musics. Soon there will be sdk-based games which are far more useful than flash over edge or even wi-fi. As for those of you who use flash sites regularly, you are probably going to get a much better experience on a large screen computer anyway (see the critters site - how the f-- would I use that on an iPhone screen even if it has flash and could do flash snappily). In short iPhone is great even wthout flash, and I'm not making "excuses" for Apple. I use my iphone dozens of times a day and I'm glad I bought it the first day! (I got $200 back, btw since Amex paid me $100 - they deserve a plug here for being so consumer friendly). If SJ doesn't want flash cause he doesn't want to help out Adobe, personally I couldn't care less.
Boring, that shows your level of creativity.

I'm sure kids will find papercritters.com very enjoyable.

And the preview not working is simply a bug they need to fix. And they should have built in a mute button. Regardless of those minor gripes, the site for what it is was designed quite well and Flash was the best choice for that kind of site period. Now step back and imagine this same site built in Java. It would be a bloated experience with inconsistent results across browsers and platforms. It would require way more system resources and that's of course after it was downloaded and complied just to be played. And any AJAX attempt would be a failed attempt with way more problems.
The usability issue comes down to the person designing the site. A poorly designed site will suck no matter what web-tech it was built in. There are more pros towards using a properly designed Flash site than cons. Saying that informational sites should not use Flash, is just like saying Macs are not good for business. Flash 9 + AS3 can do way more than any previous Flash, it's substantially faster, and as of now it's one of the most powerful web/cross-platform solutions.
And speaking of maps, Yahoo is working on a Flash 9 version of its maps. The guy working on the AS3 API in a developer video that I watched, stated that there was 10x performance gain over the current map implementation -- if I'm recalling correctly. You have your plug for AMEX, mine is for Yahoo, because they're doing some great things with Flash.
If Flash player does come out for the iPhone, it woud not be Flash 9, it would be Flash Lite(3), which is specifically designed for hardware limited devices, so it would be snappy -- well, if the dev is experienced.
Just like other devices, where as FL has support for their unique features, this would hold true for FL on the iPhone/Touch, so once again, it's up to the dev to do things right. And only for reference, look at
Flash Home to see what it's doing for other phones that aren't remotely as nice as the iPhone, which of course does not need it.
In the end, Flash on an iPhone or Touch would only be a plus. It's not there to replace the current apps, but it will certainly open up more content, which you as the user can choose to ignore.
<]=)