The iPhone does not support Flash, jailbroken or not. That image is Photoshopped.
Jailbreaking is a process that places an application called Installer onto the phone. It allows the iPhone to run un-signed code. There are hundreds of applications, such as video recording applications, drawing applications, pianos, guitars, etc. - available for download most for free. You can also theme the iPhone - change the background and icons.
Note that jailbreaking is not supported by Apple. It is a form of hacking, and is looked down upon by the company. However, it is perfectly legal. Also note that third-party applications will be available from Apple this June.
Stock (not jailbroken) iPhone:
Jailbroken iPhone:
- John