You can use mencoder (part of mplayer) to convert the videos to something you can play in the media player.

By the way, Flash can't access webcams on Linux... so this is most likely a limitation of Flash, not a limitation on the N800. No, I wouldn't want Flash to have access to the camera or microphone either. Closed source apps can't be trusted, especially if they can access the camera or microphone whenever they want. All it takes is one security hole in flash and anyone could listen in or see what you are doing. **** that.

I just want to clarify that mencoder is a part of the mplayer package, but is not packaged as part of mplayer for the tablets.