I think both Adobe and small development shops are going to benifit from having Mirosoft in the RIA arena. For the first time in a long time Microsoft is going to have to win with new ideas rather than just copying the status quo. While I'm sure we'll see other companies jump on the rich internet and bring cross platform solutions to market, Adobe has the biggest reach of anyone in the forseeable future. But with that reach is going to come a lot of responsibility, and Adobe can't afford to slack off.
I've already started to see more and more people take notice of how great Rich Internet Applications can be. We're still in the infancy, which means a lot more is going to be possible. Anytime you have two very smart companies competing, you're going to make a lot of progress very quickly. I think Flash is a great solution, and I hope that WPF/E keeps pushing it. I also hope companies like Google and Yahoo push Adobe to make Flash better. It will be very exciting to see how this plays out.