Yes, the news is true.
Yet another awesome announcement made during the Adobe MAX 2008, San Francisco conference was the Adobe Flash Lite 3.1 Distributable Player for developers to distribute over-the-air (OTA) along with their content. This means, an end user will no longer need to check for the presence of Flash Lite on their handsets. The content itself (when installed as a .SIS or .CAB file) will check for the player version, download and install it using network connectivity. It couldn’t get simpler than this.
“Flash Lite 3.1 has the same functionalities as Flash Lite 3.0, such as support for Flash Player compatible video, with some enhancements including improved security model for SWF file access. Please note that at this time h.264 video is not supported. Adobe’s goal is always to provide the latest version of Flash Lite for over-the-air (OTA) download through the distributable player solution. Flash Lite 3.1 Distributable Player will work on supported S60 and Windows Mobile devices. The Distributable Player is integrated with Adobe AppZone.”
Currently this is supported on limited devices, namely the S60 3rd Edition, 3rd Edition feature pack 1, 3rd Edition feature pack 2, Windows Mobile 5 for Smartphones, WM6 Standard and Professional platforms (check the complete list).