The first real-world tests are coming in, and Flash 10.1 seems to work quite well on Android 2.2 (FroYo), which Google has started pushing to its Nexus One smartphones. Engadget has gotten its hands on a video posted by the BBC that demonstrates Flash 10.1 running on a Nexus One vs. Flash Lite running on an HTC Desire. They're both 1GHz Snapdragon platforms, so while it's not an exact comparison, it's pretty close. The second demonstration, that starts around 1:35 into the video, clearly shows that Flash 10.1 performs much better than Flash Lite.
Update: TechCrunch reported that PocketNow did side-by-side testing of an iPhone, Nexus One with Android 2.2 and the Flash 10.1 application, and HTC's HD2, and found that Flash's performance on Android is a mixed bag. For pages where you're playing a single video or game, Flash's performance is very good, but when you intermix Flash ads, banners and videos onto a single web page, as you see all over the web, the performance is awful. In Adobe's defense, its Flash plug-in is still in beta, and it could improve its performance by the time it ships. However, as of today, Flash is likely to slow down your browsing experience considerably.