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What's cool about skyfire is that it brings flash and all kinds of smartphone browsing features to non-smartphones. That's real, *full* HTML - i.e., the "desktop Internet."
What you see in the video may not be too impressive if you are used to an iPhone, G1, Touch Diamond, etc. But if you are used to running a budget device, the experience is either alien to you, or something you have envied your friends for.
If I sound surprised by the Yahoo video page, it's because I was. Several companies have been working to bring the real web to feature phones, but it looks like skyfire won the race. I had problems running it a few months ago, but with each beta build, we're seeing significant improvement.
This one will be a force to recon with.