Going to put another bit of my 2 cents in here. Flash is fast.
Flash is fast for
reading, but it is slow for writing. The things people are talking about here, using it is a temporary storage location for streaming or in-game content, would see no benefit because they require both reading and writing.
As I pointed out before, Microsoft tried using flash memory as a temporary storage location in Windows Vista, but the slow write times meant it had no real benefit. Intel even released a dedicated mini flash memory drive to take advantage of this, called Turbo Memory, but once again the slow write times meant it didn't help in real life.
So it does not offer any benefit as a temporary storage locations, the space is too small to be useful as a permanent storage location, this is a console not a handheld so the small difference in power consumption is not a real issue, since this is a console it isn't going to move while running so the moving parts are not a major issue, and it costs about
ten times more per GB. There are simply no benefits whatsoever to using flash memory in a console for consumers. None. The only possible benefit is that the lowest-price flash memory might cost less than the lowest-price hard drives (it is already hard to find any flash memory below 2 gb these days, by late next year 4 gb will probably already be on the way out). But that is simply Nintendo cutting corners to the detriment of consumers.