Flash on my N1 hasn't quite lived up to my expectations, but my experience has been better than the reviewer's. I have flash set to 'on demand' to avoid all of the superfluous flash banner/video content fed from ad CDNs. Use firebug or resource tracker on abc.go.com or fox.com to get an idea of how many swfs and javascript files are loaded and queued and you'll understand why performance will be sub par whether playing video via flash or .
That said, in testing mp4s on my site, the same video (480x360 or 640x360 h.264 baseline) served with seems to play with less stuttering and better scaling than when using a flash wrapper.
I just wish I could play more orisinal games on the N1. The games run well, but drag mouse events seem limited to a second or two.