//This post is based on my current assumption that right now it's not possible to run a FLV file directly inside Flash Player, without use of a 'video player'
Mozilla's Firefox 3.5 supports Ogg-Theora based video-playback inside the browser. Adobe's Flash Player plugin also supports video-playback.
One crucial difference between the way they play video is that use of Flash Video format mandates the creation and use of a player for that video (if playback controls are required). In contrast, Firefox 3.5 includes a default, inbuilt video-player for video files, with a fine set of playback-controls. Website owners need to merely upload a video file to their website, and rest of the job can be done using Firefox. Website-owners resorting to Flash Video, however, also have to bear the pain of creating a player for video.
I believe that Adobe should integrate a default video-player right inside the Flash Player client. Such a move has the potential to attract a sizeable chunk of website-owners towards the Flash Video format, as it'll enable them to directly upload the FLV files to their websites, without having to dirty their hands building a video-player. The end-users benefit as they don't have to download a new video-player each time they visit a different website, and they can play videos directly within Flash Player, with a consistent user-experience.