A couple of points.... I think of when I hear of Sparkle / Avalon being a "Flash-Killer."  In reality they are apples and oranges... Avalon / Sparkle is like Flex but it's much more than just Flex.

1 - Sparkle is an application to build user interfaces.  Like Flash these interfaces can live in a browser.  Unlike Flash you can run it on the desktop (smart clients, rich clients--this is important and Manuel talks about this idea of building "real applications").

2 - Macromedia's "Presentation Server" is great if my applications all run from a server.  If I have an application that needs to run somewhat disconnected or completely disconnected I am screwed.

3 - Avalon / XAML is a single platform to develop applications running on desktops, web apps, compact devices.

Microsoft has gotten something REALLY right here and it appears they are actually first with this.  I can't believe Macromedia isn't doing this exact thing but pairing up with Sun and Java to make cool interfaces available to web, desktop and compact device developers.  Swing is lame, Windows Forms is lame...

This is the future.