If you're concerned about whether your own Flash content can be indexed as it stands today, rest assured that Google can indeed access textual content in SWF files - from Flash buttons and menus to self-contained Flash on Web pages - that are located on your website. In fact, almost any text visible to a user when interacting with a SWF file can be indexed by Googlebot. What's even better news for websites with Flash is that the information it gathers can be used to generate a snippet and match query terms in Google searches.
Googlebot can also discover URLs ins SWF files and follow those links; so Google can crawl and index those pages if your SWF contains links to pages inside your website. You can thank external resource loading for that. This means that when a SWF file loads content from some other file - whether text, HTML, XML, or another SWF - Google can index that external content, too, and associate it with the parent SWF file and any documents that embed it.
Google indicated today that it has made improvements in the way it handles JavaScript, and can now better recognize and index sites that use JavaScript to embed SWF content. Google has also made improvements in its video indexing technology, and is better at detecting when a page has a video, and does a better job of extracting metadata such as alternate thumbnails from Flash-based videos when possible.
So we finally live in a world where Flash and SEO get along nicely, right? Not exactly.
Despite Google's improvements and regardless of how awesome it is that Google can finally reach and index some content that, for so long was hidden away in inaccessible Flash files, it remains almost taboo for designers to create inaccessible, bloated, and non user-friendly websites in Flash which many users (e.g those on slow connections, and iPhone and iPad users to mention a few) cannot efficiently use. Couple that with Google's new focus on speeding up the Web and we're left collectively scratching out heads.
Flash remains a problematic medium at best for publishing content online. The lack of unique URLs, page titles, link anchor texts and content hierarchy are only some of the common issues and factors that make Flash content far more difficult to classify and work with for search engine optimziers. Compare this with HTML content and it's obvious that the two cannot compete on a level playing ground. This is especially worrying since it's pretty clear that Flash websites (and Flash components in general) will continue to face problems with efficient crawling, indexing and ranking - just take a look at the treatment that Flash gets through Google's new Instant Preview.
Endorsing sends the wrong signals and might even be seen by some as contradictory to Google's latest push to make the Web faster.
So what's a Web professional to do? First, don't expect Google and Adobe to open up any time soon about how SWF content is indexed and what exactly they are looking at. Second, try to predict where you think Google might be heading - my money is on HTML5.