There's a little more to it than that. One of the reasons given for not supporting Flash initially was that it would drain the battery faster. Now that Flash will support H.264, that issue goes away. It's not rumor or speculation, just a logical conclusion that the iPhone will now support it.
Um thats not logical. There are several issues with Flash on the phone, neither of which are fixed with Adobe adding h.264 support. Just because they support h.264 does not logically equal that flash is less of a drain on the battery. Integrating Multi-touch into flash is most likely the biggest problem to overcome.