Previous iterations of Skyfire weren't very good, but this one sends all Flash video elements it encounters to its servers, transcodes them into HTML5, and sends it back for viewing on your iPhone. It takes 10 seconds or so to get going but it requires nothing from the user and does all the hard work so you don't have to. Unfortunately, Skyfire can't do the same for Flash games or Flash apps: this is only for Flash video. Furthermore, Hulu won't work because of the way the site is designed.
Apple made a point to all but kill Flash on all of its devices, but it still decided to let this app into its App Store. If you really want the app, make sure to download it now in case the company changes its mind and pulls it.
Update: The app reached such high demand that the company had to pull it. "The user experience was performing well for the first few hours, but as the surge continued, the peak load on our servers and bandwidth caused the video experience to degrade," Skyfire said in a statement. "Thus we are effectively 's'old out' and will temporarily not accept new purchases from the App Store. We are working really hard to increase capacity and will be accepting new purchases from the App Store as soon as we can support it. Within 5 hours, Skyfire for iPhone became the top grossing app, the third highest paid app overall and the top application in the Utilities category."