Stefan Richter at Flashcomgurus and a host of other Flash enthusiasts are excited by Adobe’s announcement that the next generation of Flash will support H.264 Video. This bit from Stefan:
The bottom line: a huge step forward for web video. The Flash Player will incorporate what is arguably the most versatile and most widely adopted video codec around (it’s used for much more than just web video), and it’s an open standard at that with a huge eco system of encoders and tools to boot. Let it sink in and expect some big waves from this. You will be able to test this out via progressive download (I know I will) once Flash Player Beta Update 3 hits the streets later today on labs. Both Flash Media Server and Flash Media Encoder will support the codec in upcoming versions.
I think Adobe’s moving in the right direction at least in part because of the competitive pressure from Microsoft’s Silverlight.