This could be leading to a whole load of trouble. Just had a look at the draft of the new iPhone developer program license:
3.3.1 — Applications may only use Documented APIs in the manner prescribed by Apple and must not use or call any private APIs. Applications must be originally written in Objective-C, C, C++, or JavaScript as executed by the iPhone OS WebKit engine, and only code written in C, C++, and Objective-C may compile and directly link against the Documented APIs (e.g., Applications that link to Documented APIs through an intermediary translation or compatibility layer or tool are prohibited).
So apple maybe able to block any iPhone app created using flash CS5... but I have also just read this from the source -
New York PostApple May Be Forced to Allow Developers to Create iPhone Apps with Adobe Tools
The U.S. government is supposedly looking into whether Apple broke antitrust law with a recent change in its developer agreement that blocks the use of tools like Adobe Flash CS5 to create iPhone apps.
Adobe recently released Flash CS5, which enabled developers to create both Flash and iPhone versions of their software. In response, Apple changed the iPhone developer program license to say that apps must be created with Objective-C, C, C++, or JavaScript, excluding Adobe's tool.
Now there is word that the U.S. Department of Justice and Federal Trade Commission are in the process of deciding which of these two will start an investigation on whether Apple's move violates U.S. antitrust laws. The investigation will supposedly center around whether Apple's move is intended to make it harder for developers to create cross-platform applications.