I've just discovered that it is possible to get flash 10.2 (with some tweeks) to work on ubuntu with full hardware acceleration. Does this mean hardware acceleration is fully supported in flash 10.03 on ubuntu without manual tweeks?
Phoronix have an article on Flash 10.3 - in summary, Flash still does not have hardware acceleration except for the most recent NVIDIA cards.
See wikipedia for details of vdpau support in nvidia cards.
See also this Phoronix article for vdpau support in netbooks.
However the next release (10.4) should be more interesting for those of us using ATI or Intel since Adobe should start supporting these through the VA-API interface.
I'm not sure what kind of tweaks you are talking about considering that Flash is not open source. It is necessary alright to edit /etc/adobe/mms.cfg to enable accleration. The hardware acceleration of the flash 10.2 plugin is dependent on the website supporting the Stage Video API. Currently Youtube does; not sure how many others. The other problem is that enabling acceleration causes many websites to break. I'm hoping things will improve but in the mean-time I'm still opening flash-video in Smplayer.