The Edge definitely has the ability to process Flash, even with the processor underclocked at 800 MHz.
Installing Flash 10.1 results in audio with no video. In my case I had to uninstall it because it was interfering with Flash Lite which the Edge uses for other video sources (You Tube). Flash 10.2 will not install.
Skyfire is a web browser that proves the Edge can play Flash content but there is a small pop-up preview window that will not go away.