About a month ago Kevin Lynch from Macromedia gave a presentation at the Web 2.0 conference. In the talk he discussed some of the new features in Flash 8.5 and Flex 2.0. One of the themes of the talk was that Flash was built for creating animations, not applications. From experience I can tell you that writing a flash application can be a painful experience. Macromedia is planning on changing all of that.
For me there were a few important highlights.
First, Flex 2.0 will leverage the Eclipse editor platform for the editing of code, a big step in the right direction. It looks like they did a pretty good job with the editor as well. You can drag and drop components onto the WYSIWYG canvas, change their properties, and then view the generated XML code. The XML code can then be edited by hand, and code hints guide you as you add new tags and attributes. Within 5 minutes Kevin was able to build a simple application that searched his collection photographs on Flickr and displated them. This met with a round of applause.
The last important point is the adoption rate of the Flash player. Historically it takes one year for a new Flash version to hit 80% penetration, and then 90% shortly after that. This means in about a year or so, Flash+AJAX applications should be a seamless experience for the user.