In the past, the search engines (Google, Yahoo, Microsoft Live, et all) couldn’t really search Flash files that well. Well Adobe has been working with the search engines to allow them to search the Flash sites, widgets, buttons, and more.
This is good news on the surface, but still requires one digging a little deeper before trying to get a nifty Flash site. Here are three quick take aways to know about, before
The first thing to know, is you still have to use text, as text, to be searchable. Many Flash developers convert the text into something known as shapes so that they can manipulate it easier to look nice on your screen. While your site will look nicer overall, it will cause the search engine to fail to read that part of you Flash site.
Second, most search engines cannot run JavaScript. Because of a software patent issue, Internet Explorer needs JavaScript to write the Flash file to the webpage. So now, in many cases, your Flash site is no longer searchable.
Flash screens, are not the same as web pages, and that means it will be harder to isolate a topic and rank for it, when looking at the overall site with all of the other text working along with it. Add upon that, that most Flash developers are inexperienced at Search Engine Optimization, and lack good tools to build a search optimized site (links, individual pages, helpful page elements, etc) they will most likely not be able to help you rank like a good HTML based website could.
Overall, I would hold off on developing your all Flash based sites if you are interested in long term Search Engine rankings. (Besides, most developers charge more for Flash sites – use that money to make more content which can rank in the search engines, it will be money better spent.)
SEOmoz has more information on his views on why Flash and Search Engines still don’t mix.