According to RipCode's press release, the TransAct Transcoder V6, as it's being called, captures the iPad's request for Flash content and converts it into a special format that the device accepts and plays. This is all done without a local client or user intervention.
"RipCode's Transactional Transcoding platform enables an alternate and immediate solution to this issue, opening up video content to users without requiring the content hoster to move to HTML5 or pre-transcode entire video libraries from Flash to an iPad-accepted container format. By transcoding the content 'in the cloud', it is essentially analogous to a network-based Flash to MP4 or MPEG-TS video adaption layer."
Neowin : http://www.neowin.net/news/flash-comes-to-the-ipad-via-ripcode