Great news for multiplayer flash games!
In the latest beta release of Flash Player 10, Adobe introduced the RTMFP support.
In short this technology will allow P2P communication between players and UDP:

Direct (P2P) communication between Flash players.

Every flash application will be able to connect to another without going through a server, saving bandwidth and lowering latency.
A Flash Media Server will be required to establish the connection between players.

UDP communication with a server

The next version of Flash Media Server (and maybe of Red5) will allow audio and video streaming from and to the flash player over the UDP, which is a more efficient way to deliver low latency packets.
Applications like Skype and the majority of multiplayer games already use that with obvious advantages.

Further informations:
RTMFP FAQ
Flash Player 10 Release notes
UDP Wikipedia entry