It's been going to happen for a long time, and a lot of people have already written about it, but now that Microsoft is actually shipping hobbled versions of Internet Explorer, it's just a matter of time before we all start hearing complaints from people who are unable to view Flash content.
The Lowdown
In a nutshell, a company called Eolas has been trying to enforce a patent saying that they own the right to display active content in a web browser against Microsoft and Internet Explorer. After years of legal wrangling, the courts came down on the side of Eolas, and now Microsoft has had to change the way ActiveX plug-ins work in IE.
The Problem
The problem is that IE is no longer allowed to automatically display content coming from an external plug-in. So in order to see or interact with some content (including Flash), the user will have to actually click on the content to activate the plug-in.
It's very likely that if you are using the standard <object><embed> tag method of embedding Flash content, then you'll be hearing complaints/reports of your work being "broken". In actuality, the work isn't broken, the legal/patent system is.
The Solution
Well, sort of a solution anyway (more of a work around) is to use JavaScript to render out the object/embed information. Apparently, when this is dynamically rendered in client-side code, IE is allowed to execute the external plug-in to automatically deliver the content.
The good news of all of this is that there are some great tools that have been developed that will do this for you, and add a lot of features (like Flash player detection) that the old object/embed didn't offer. Plus, once you get used to it, it's actually easier to write the embed with JavaScript that the cryptic object/embed tag method.
A great (and widely used library) for doing just this is Geoff Stearns' FlashObject. Instead of having to include the massive object/embed tags, you just need to link to the JavaScript, create a holder (a div with a unique ID) for the Flash content to be placed in, and a couple of lines of JavaScript. For example:
After downloading FlashObject and placing the JavaScript file on your server, the first line in this code loads in the JavaScript file. The div with an id of "flashcontent" represents where in the document the Flash content will ultimately reside. This tag has the very cool benefit of providing alternate content for search engines. The text in "flashconent" will never be displayed to the user if they have JavaScript enabled and Flash installed.
Finally, the two lines of JavaScript creates an instance of the FlashObject object (setting up it's basic parameters) and then calls it's write() method to have it automatically render the object/embed tags in the location of the div with the id "flashcontent".
In addition to overcoming the Eolas issue, FlashObject offers a whole bunch of other features to manage player version detection and upgrading. For more info about FlashObject, get the details from deconcept.com.
Additional information about the problem (and how it affects other products like Acrobat), check out Adobe's Active Content Developer Center