Adobe today announced the first public beta of Flash 10.1, which despite the small version bump suggesting it is a minor upgrade, finally delivers support for hardware-based H.264 video acceleration. For now the new functionality is limited to Windows computers, but it's worth getting excited over anyway, as it means you'll get smooth HD Flash video playback while significantly reducing the workload on the CPU.

This couldn't come at a better time with 1080p HD YouTube videos launching this week. At this stage Nvidia chips should work best since the company worked directly with Adobe – AnandTech has put the new hardware accelerated video playback to the test and reports that Hulu playback on Ion is "nearly perfect." ATI Radeon 3xxx and Radeon/Mobile Radeon 4xxx, Intel 4 series chipsets and Broadcom Crystal HD models are also supported. Unfortunately for most netbook owners, GMA500 and GMA950 integrated graphics are off the list.

Adobe plans to bring its updated Flash Player technology to mobile devices as well, starting with the Palm Pre and then completing versions for other major smartphones by the first half of 2010.

The company also announced an AIR 2 beta which allows developers to build more feature-rich applications, including full support for mass storage, multi-touch gestures and accelerometer support, communication with actual native apps, USB storage device detection and claims of significant performance increases.