Google officially began indexing forms of Flash (SWF) files in 2008. But there were signs of Google indexing Flash back in 2004.

That being said, Google announced that they are able to index and use “almost any text a user can see as they interact with a SWF file on your site.” Google said:

I wrote a bit more on this at Search Engine Land.

In short, it does not mean you should build your site fully in Flash. It does mean that Google is better understanding Flash and the content and links within those files.

Forum discussion at Search Engine Watch Forums.