Walt Mossberg has posted a list of common questions about the iPhone.
When asked about the iPhones ability to play online video, Mossberg answered:
At launch, the iPhone version of the Safari browser is missing some plug-ins needed for playing common types of Web videos. The most important of these is the plug-in for Adobe’s Flash technology. Apple says it plans to add that plug-in through an early software update, which I am guessing will occur within the next couple of months.