A new bookmarklet aptly called iOSFlashVideo has recently been released that allows users to watch Flash videos from sites like Vimeo, Dailymotion, Flickr Video etc and you don't even need to jailbreak or hack your iPhone.
You can follow these step by step instructions to setup iFlashVideo on your iPhone, iPad or iPod Touch:
1. Open your iDevice's Mobile Safari browser and point it to http://iosflashvideo.fw.hu/
2. Add the page as a bookmark (Tap on "+" button, then "Add Bookmark" button and then "Save" button).
3. After the bookmark has been added, you need to go back to Safari Bookmarks to edit the iOSFlashVideo bookmark. (Tap on the Bookmark icon, then tap on the "Edit" button and then tap on iOSFlashVideo bookmark).
5. Now, if you navigate to any webpage with Flash video content (except YouTube), you will notice that the embedded Flash videos will show up as a blank whitespace.
6. To watch the Flash video, simply tap on the bookmark icon again and tap on the iOSFlashVideo bookmark. The Flash video should now load on your iDevice's Mobile Safari.
Source : iOSFlashVideo blog