Flash for Mac OS X now supports hardware acceleration of HD H.264 video content
The hardware acceleration should work with all Mac computers that sport a recent NVIDIA graphics card (9400M, 320M and 330M). Also, because this new version of Flash relies on new operating system functionality, you also need the latest version of Mac OS X (10.6.3) to take advantage of the faster and smoother video.
It won't work with every system, but there's a list of systems that should support the new player. If the hardware acceleration is active you will see a white rectangle in the top left corner. The same page also has further technical details -- you can only hardware accelerate two videos at once, for example!
It's good to see Apple and Adobe are still working together.