A few notes. I didn't see any software crashes. The tablet, on the other hand, did have quite a few hardware problems. But that's because it was literally made just this demo. The tablet is encased in a clear plastic case that looked like it was hacked together in some lab. One of the Adobe employees told me it had "a motherboard and NVIDIA card". Some of the hardware connections were loose apparently because when I would set it down on the table a bit too sharply, some of the buttons would fire sometimes sending me back to the home screen. The touch screen didn't seem the best quality as someone else noticed. It wasn't very responsive. Not sure if that was a hard drive or software problem.
On the Droid, I watched a movie preview on Yahoo Movies and it played flawlessly.
So as for me, from what I saw today, I'm cautiously optimistic about flash on phones/tablets. I'd still prefer HTML5 of course but flash on phones will work as Flash is slowly replaced over the next 5-6 years.