I believe it has to do specifically with how drawing to the screen happens; if that has to go through the browser, then it can't utilize hardware acceleration.

I believe it has to do specifically with how drawing to the screen happens; if that has to go through the browser, then it can't utilize hardware acceleration. One interesting test we did recently was to make a very simple flash app that draws some basic controls on the screen and scales to the window size. It also prints out the amount of memory being used by the AVM. In IE, memory usage was extremely low and was about the same regardless of the screen size. In Firefox, memory usage was higher and also almost entirely dependent on window size. To me this implies that IE is allowing Flash to interface with the video card directly, while in Firefox it's having to maintain its own frame buffer internally.