Its official: The next version of Flash Player will feature the H.264 video codec.
Known as MPEG4 Part10, H.264 is a video standard yielding a much greater compression than its predecessors.
Such is the reduction in bandwidth that it's possible to increase the quality while reducing the bandwidth requirement by an order of magnitude.
Now, decoding H.264 does take a bit more of processing power, though this has been partially offset by much cheaper processors. Also, the appearance of specialist circuits also helps to further reduce costs. With Flash on-board, H.264 is set to quickly dominate Internet streaming.
At the moment, YouTube is encoding all new uploads in H.264, and Apple Quicktime has had it for years.
You can grab the beta of Adobe Flash here.