You can play videos (flv) in safari now. There is iMobileCinema plugin available which can help you play flash (flv format) videos in safari. I think this is something which we all have been waiting for. Follow below steps to integrate the plugin in your browser:

1. First you need to have 2.x ver of firmware.
2. Add source d.imobilecinema.com in Cydia.
3. Install iMobileCinema application from Multimedia section in Cydia.
4. It is advisable to restart your mobile after installation is complete.

Your mobile is ready for playing videos in safari now. You can test it by opening any video which is marked playable (marked with play sign) in youtube site. Thank you.