indeed it does...
haven't tried it so i can't comment on the compatibility with native Flash, but these two (major) points from the Lightspark Wiki could be difficult to overcome for adaptation:

*) JIT compilation of Actionscript to native x86 bytecode using LLVM
*) Hardware accelerated rendering using OpenGL Shaders (GLSL)

i'm not sure how much effort is needed to compile for the ARM architecture instead of x86 using LLVM (or if it's possible at all), and GLSL is only rudimentary supported by OpenGL ES 2.0 as far as i know.

this sentence from the lightspark FAQ makes it seem even more unlikely that it would work:
"Lightspark uses some rather advanced OpenGL techniques that requires good support from video drivers."

not even debian maintains armel packages of lightspark, and that's a very bad sign... they usually compile for every arch possible.

tx for the hint btw, didn't know about this project until now