On my unrooted Moto Droid, most of the videos on sites that are referenced by Skyfire work. I am pleased with this aspect. As others have posted, I, too, have not figured out how to fast forward on the videos.
As others have noticed, Hulu videos do not work. I also could not get the flash NY Times videos to work. Sites that have yet to work for me also include TV episodes on abc.com (like Lost...), Netflix, and a few others.
All in all, the progress on getting videos on our phones has been enlightening. Back in December 2008, when I got my Storm1, I was elated to get any videos at all. Now, about 18 months later, we are on the cusp of viewing videos of all types on our phones. In just a few short months, we should have Android flash working for us.
The questions that remain are what sites will have videos for free, what sites will charge, and for those who charge, what will be the fee.
Be well.