There is SkyFire on the Windows Mobile for users to browse Flash enabled sites. Now, you also have an equivalent known as Cloud Browse which runs on your Apple iPhone 3GS.
So how is it being done? Basically, it is running a Firefox browser remotely. Cloud Browse runs the browsers on a separate machine and not on your iPhone, so no need to worry about websites grabbing your private information.
Below is a video demonstration showing the flash videos. Notice that the solution is not perfect but you get to see the sites powered with flash rendered correctly. Youtube plays with but with some noticeable lag.