No, it doesn't. It slows down the entire device, sucks battery power, scrolls very choppily...
If it's an iPhone app, it's not using Flash OR HTML5. Flash and HTML5 are ways to deliver video through a web browser, and are separate from the format of the video itself. In your case, the video is being delivered through an app, not Flash, nor HTML5.
DUuuuuude!
Actually that's not true overall about Flash. And slowing down the entire device! NO, not even remotely!
Flash is freaking FAST on my unlocked Nexus One -- I'm sharing because I just got it!.
**There's an option under plug-ins called "On Demand." With this enabled, Flash does not load until it's clicked -- sound familiar?
Now the actual browser -- which I think is Chrome under Froyo 2.2 ABSOLUTELY DESTROYS mobile Safari on all fronts -- no mater which device is running Apple's slug-browser. It's lightning fast and actually feels about the same as Chrome on my Unibody 17". It display a REAL web page for all the sites I visited, not the mobile crap I've been served up with my Touch more and more over the years. And this is on a 800x480 screen, vs my iPod's 480x320 screen. There's never no LAME checker board pattern -- even with Flash set to load by default, the pages load and displays super fast! Sites like Slashdot behave like they do on my desktop, not the click-more crap like under way slower mobile-safari.
And FLash by default does not suck the battery, nor is it a CPU hog to throw that in. It's all on the developer and you should know this, as the same applies to games. And once again, most of the content I encountered did not effect the scrolling of the page at all. The multiple FLash pieces would wobble a bit, but no bothers, since I have the option. Flash runs absolutely great on my Nexus One and that's awesome, especially when considering that Flash 10.1 is still beta and Froyo 2.2 is not a final build.