I do not work for Moonfruit nor am I affiliated in any way financial or non-financial with Moonfruit. I have a Client that uses Moonfruit for whom I am managing SEO. I have investigated into this matter fully and the following is my professional opinion and fact which I can prove with evidential findings:

It is true that content within a flash file cannot be indexed by Googlebot or Yahoo Slurp. However Moonfruit has overcome this issue in its entirety.

Although viewing a Moonfruit site via a desktop web browser displays a flash website; when a search engine looks at the site a HTML version is presented. Therefore there is no need to remove the flash.

If a user visiting a Moonfruit site does not have flash installed they are presented with the HTML version of the site and as such are mobile / iPhone friendly.

So, well done Moonfruit developers!