As of now, you cannot compare Flashlite and J2ME. Its almost like comparing Javascript with Java. Flashlite has very limited capabilities . Add to it the limited capabilities of a mobile device. If your application want to access phone's file system(r/w), or want to access phone's camera, FlashLite alone wont help. [its only possible with a java or python wrapper] From my personal experience Flashlite is most suited…
Yes, I need to access the file system rw and camera. With Flashlite, I wonder if you have to be online also.
Here is an example for a python implementation: http://code.google.com/p/flyer
Once installed Flashlite acts almost like a flash engine from which you can run swf created for flashlite.