I was trying to upload a photo on facebook using a browser with no flash, and could see that it didn\'t work.
I am pretty confident in handling files and related issues
when I should decide to use flash for user uploads.
use it when the whole website is flash, but that is not professional and you can't count a lot on flash security, while you can write/use a lot of classes for hardening and checking files uploaded by php scripts..
on the other hand, some people like flash upload for progress bars, but you can do such stuff with php and jquery. for example check uplodify
Correction
I don't have flash support on my current browser so when watching uploadify demos I only see the fallback, thanks to soulmerge for making this clear