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OBS: The hardware acceleration is not part of the 10.1 release. It will only be provided in an update after the 10.1 release.
Right -- 'Gala' is not 10.1. It's a separate preview release.
To date, support for hardware accelerated H.264 video playback in Flash Player has only been possible on Windows PCs and x86-based netbooks

I love how they try to make it look like they support two different platforms when they're both exactly one and the same..... and they forgot to add "that run Windows" at the end of the sentence, because netbooks running Linux or OS X are not hardware-accelerated.

Shame, really.

I don't think they're making it sound like they're supporting two platforms, they're just trying to exclude non-x86-based netbooks..
So couldn't they have taken their cue from the PC comment and said:

"To date, support for hardware accelerated H.264 video playback in Flash Player has only been possible on Windows PCs and Windows-based netbooks"

Or simply "On Windows-based PCs and netbooks"
not on my slightly older imac's graphics card.
Question is 'Does it actually work?'

And if it does, What's the actual improvement in performance?

EDIT: I'm not being sarcastic, I'm really asking... DOES IT WORK?

I'm still getting 60% (of one core) CPU utilisation playing HD youtube videos. Playing HTML5 video tag version of the same video, its only about 20% utilisation. As far as I can remember, 60% is about what it was at before, so I'm not really seeing any improvement.

One of the videos I used to test: http://www.youtube.com/watch?v=rQ_z-_4fF4Y

I'm using Safari, and also ClickToFlash for switching between Flash and HTML5 HD video on Youtube. Hardware is a 2009 Macbook Pro 2.53ghz.

Do you see the white square?

Some of youtube's videos are FLVs, not H264. This is for H264 only.

Correct me if I'm wrong, but aren't all Youtube HD videos either H264 (.mp4) or H264 in an .flv container? I don't see why a particular container format would prevent hardware decoding of the H264 video stream.
I would rather have proper 64bit support for linux....
It's funny. Every blog post Adobe makes about improving Apple support has complaints like this in it. But every one about improving Linux support has complaints about Apple support.

(Although lately the Apple complaints have changed from "make it suck less" to "screw you we don't need you".)

You can already play H.264 with hardware support using QuickTime on the Mac so there is no reason to use a Flash player. The only reason to use a Flash video player on all platforms is laziness.
Given that there are Flash players which simply wrap around H.264 files, there's no reason not to use <video> on browsers which support it, and fall back to Flash on browsers that don't.
From the release notes: "This framework is only supported by Apple on Mac computers equipped with the NVIDIA GeForce 9400M, GeForce 320M or GeForce GT 330M graphics chips."

Unfortunately my three year old MBP is too old :( If someone with a newer Mac wants to report back on how well this works, here is a good test video: http://www.youtube.com/watch?v=4N2YWRJ-ppo