I remember you had to install flash in my pc days too, but some installations came preloaded. Flash is plugin for the browser from adobe (formerly from macromedia) that allows such "rich" content as clips, animations, flash games etc. These are by far most in usage by ads, but some website built navigation menus on flash animations, at least they used to be big on it a few years ago, it's trend that is dieing out now. Clips can also be encapsulated in a flash format which gives no real advantage other than paying adobe royalties. Open standards such as html5 aim to do away with the middleman in flash and they handle video just fine. They are not that employed yet however in terms of other types of rich content.
Alex what you can do to see how flash impacts your system, or what is or isn't flash) is install the click to flash safari extension. Got to file menu on safari, click on safari extensions gallery and then on click to flash to download it. You should have enabled extensions in safari preferences btw. It's a great add on that blocks flash and then you can double click only on items you wan to see. It' simple you 'll figure it out and if you don't want it you can just got to preferences and unselect enable extension where click to flash is. But I am sure you are going to like it, most people do anyway. Another great feature it has, two actually, is that you can explicitly set on website to allow all flash content, and even better wherever click to flash finds content in better formats, html5 say in youtube for clips, it gets these instead of flash. For one thing you get rid of tons of annoying ads that would hog resources for no reason.