Can you really build flash apps for free? Honest question — I thought you needed to have Flash.

If you do need Flash, you have things backwards. For one, he's talking about web apps, not iPhone OS apps. Web apps are entirely open and Apple is huge on pushing what you can do with the web.

Also, building iPhone OS apps is absolutely free. The entire SDK and documentation is free of charge, you just need a Mac to develop on. You need a $100 membership to sell iPhone apps, which is very different from needing it to try out development.

Flash on the other hand, costs $700.

Flash is entirely closed. Apple is mostly closed and is totally up front about it, but they completely support open web standards.