Regarding Flash being on the iPhone, John Gruber at Daring Fireball had a couple of great posts about the subject that I think really sum it up well. The main points are that Apple would not want Flash on the iPhone for the reason that it ties them to a proprietary technology they don’t own, and which they probably aren’t losing any iPhone sales because of not having. I think Apple’s strategy of supporting their own technology (Quicktime), and deploying more open technologies that are already compatible with modern web browsers with no plugins make’s a lot of sense from Apple’s standpoint.

“The mobile market is wide open in ways that the desktop market is not. E.g., in the mobile OS market, Microsoft isn’t even in first place, let alone a monopoly. And, in the mobile world, Flash is rare, not ubiquitous. Why would Apple help Adobe establish Flash as a de facto standard for the mobile web, too? If Flash does turn into a major force in the mobile world, Apple can always add it later. But why shouldn’t Apple push for a Flash-free mobile web future now?” (Daring Fireball)

Since Apple doesn’t want to help Flash become a mobile standard of any type, the idea of Flash running as a Mobile Safari plugin in the near future is out. If Flash was allowed to live on the iPhone , it would most likely have to be in the form of a standalone flash player. This player would not be linkable from Mobile Safari without Apple’s help, and since Apple doesn’t want or need Flash on the iPhone…

Gruber also points out that loading Flash on the iPhone without Apple’s express permissions would actually violate some of the terms of the SDK agreement.

“So, if not a MobileSafari browser plugin, then perhaps Adobe is working on a standalone Flash player app for the iPhone. But if that’s the case, (a) it would still require help from Apple in order to allow users to tap on Flash links in MobileSafari to launch the standalone Flash player; and (b) it would contravene this portion of the iPhone SDK Agreement:

An Application may not itself install or launch other executable code by any means, including without limitation through the use of a plug-in architecture, calling other frameworks, other APIs or otherwise. No interpreted code may be downloaded and used in an Application except for code that is interpreted and run by Apple’s Published APIs and built-in interpreter(s).” (Daring Fireball)

So that’s my explanation for why I don’t believe Flash will be included on the iPhone. Read the links in Krista’s post a while back or check out these couple right here for Daring Fireball’s which I’ve quoted from in my post.
Flash on iPhone Politcal Calculus (Daring Fireball) and
Up Flash Creek Without a Paddle (Daring Fireball)