Looks like Flash apps are GO on the app store. No Flash player for the browser, but developers can now submit apps to the app store that have been created with CS5.

I wonder if any money changed hands to make this happen? Perhaps Apple has been seeing some quantity/quality of apps coming out on other platforms made with these tools (are there any?) Maybe it was necessary to also allow other tools that many developers had already been using...

I wonder what Adobe is going to say publicly about this latest policy update...

Press Release: http://www.apple.com/pr/library/2010/09/09statement.html

They're also publishing a review guideline to let developers know how their apps will be reviewed.