Hi there.
It plays standard sd flash videos just fine, however it will stutter when you try to play high definition videos on flash. So youtube hd will mostly not work.
However, you should know that in the near future dell will be providing the option of the broadcom crystal hd chip which will do video decoding on hardware, which officially supports full hd playback on flash (starting with version 10.1 which is currently in beta) and windows media but also other unnamed 3rd party players.
If you can't wait for that i'd search some netbook that has the nvidia ion graphics chip.
---------- Post added at 05:34 PM ---------- Previous post was at 05:13 PM ----------
Btw, firefox is known to cause stuttering on flash videos. This is because it refreshes information of your tabs every 10 seconds. There is no fix that i know of, except a workarund that works well: to increase the update interval. See here for instance:
Fix Flash Video Flickering or Stuttering in Firefox | Dotnetwizard.net | MyDNW.com
Also what I think helps is to install the latest flash. Version 10 at least, maybe even the 10.1 beta.