News straight from the Flash Player development team:
* You can load and play .mp4,.m4v,.m4a,.mov and .3gp files using the same NetStream API you use to load FLV files now. We did not add any sort of new API in the Flash Player. All your existing video playback front ends will work as they are. As long as they do not look at the file extension that is, though renaming the files to use the .flv file extension might help your component. The Flash Player itself does not care about file extensions, you can feed it .txt files for all it matters. The Flash Player always looks inside the file to determine what type of file it is.
* A new version of FMS is upcoming and will support the new file format. This is powerful stuff. Simply drop video files you might have encoded using one of the countless tools out there onto the server and it'll stream.
Based on the rest of Tinic's post (it is a long and somewhat technical read), it looks like Adobe will be transitioning away from the FLV format due to some technical limitations. But, I'm wondering if the change will enable some sort of rights management -- even though the post says the Flash Player will not support FairPlay protected videos, there are plenty of other rights management systems out there. Rights management is a very commonly requested feature by sites like ABC.com and others who used to stream all their video in Flash.
Lastly, now that YouTube has been encoding all their video into a Quicktime-playable format (for the iPhone and AppleTV) as well as FLV, I'm wondering when/if they will switch over to only H.264 encoding with Flash Player delivery. This is a win-win for Adobe and Apple: the Flash Player will remain the delivery method of choice due to its massive install base, and H.264/Quicktime formats have just made a comeback as the encoding choice for web delivery.
Update: Ryan Stewart answers some common questions about this update, and Aral Balkan has a very detailed FAQ on his blog. I also adjusted the title to be more technically correct, as Apple didn't invent the H.264 codec, just enables Quicktime to play the specific codec format.