The “tubes” are getting clogged with the news from Adobe MAX. Straight from the horse’s mouth:
Flash Professional CS5 will enable you to build applications for iPhone and iPod touch using ActionScript 3. These applications can be delivered to iPhone and iPod touch users through the Apple App Store.
It’s worth noting that Flash still won’t run in Safari on iPhone and Adobe stresses that the output for iPhone is not .swf or AIR, but a native app.
According to Adobe, they’re using LLVM for a compiler:
We created a new compiler front end that allowed LLVM to understand ActionScript 3 and used its existing ARM back end to output native ARM assembly code. We call this Ahead of Time (AOT) compilation—in contrast to the way Adobe Flash Player and Adobe AIR function on the desktop using Just in Time (JIT) compilation. Since we are able to compile ActionScript to ARM ahead of time, the application gets all the performance benefits that the JIT would offer and the license compliance of not requiring a runtime in the final application.