Smokescreen is still in its infancy, but the tech lets your iDevice view Flash content. The downside is that at this point it's just ads. Nothing anybody wants. However, if future builds could take things further, it be a technology welcomed by many iPhone and iPad users.
As for how it works:
"It runs entirely in the browser, reads in SWF binaries, unzips them (in native JS), extracts images and embedded audio and turns them in to base64 encoded data:uris, then stitches the vector graphics back together as animated SVG."
Basically, it's a code you can grab that converts simple Flash banner ads into something that works on the Apple device (Java and HTML5).