Why flash has a problem
The problem flash has with search engines is the current search engine spiders which crawl the web to find and index new sites cannot read flash files. I don't believe flash will ever be read by search engines as it would just be to easy to abuse with ActionScript to hide text then you have layers etc which all could be used to abuse there search engine ranking and for this reason I don't think search engines will index flash sites for the foreseeable future.
What are the options for full flash sites
HTML Start over with html this is by far the best option. HTML is what search engines love to see and I doubt flash will ever be properly indexed by search engines where as HTML always will be.
Cloaking is where you show the search engines something different than you show the user. For example when a user clicks your website a flash file is displayed which is your website. Where as when google bot visits the site a html document would be displayed containing relevant text to your website containing relevant h1, h2, and h3 tags as well as better title and description tags. Many technologies can cloak such as PHP, htaccess, ASP and many more server side languages.
Keeping flash without cloaking Things you can do to help without cloaking or changing your site to pure html. First off title tag your title tag should target your specific keyword or keywords try not to go for to many keywords. Title tags are very important and you should spend some time looking into the best possible title tag for your site. Remember not to make your title tag too big. The description tag is another very important tag this should contain a relative description to your page mentioning your desired keyword twice. Make sure not to over do your keyword relevancy if it looks spammy no one will click your link in the SERP'S(SEARCH ENGINE RESULT PAGES). If possible you can also include a title above your swf file using h1 or h2 tags. This way the search engines will at least get some relevant content. In the same way some company or product information in the body tag under the flash file can also help give the SE's(SEARCH ENGINES) relevant content.
HTML sites as well as flash I don't like these kinds of sites and they really won't work very well. Google mainly rank on IBL's(IN-BOUND LINKS) SO you have the choice of either sending all your links to the HTML version of your site and just ranking for the html version or link to your flash file and rank for both the flash and the HTML version. However neither pages would rank as highly as if your IBL's linked to the html site.
I'm my own opinion I would always change the site to pure HTML flash is an amazing application and in my own opinion should be used for web based applications. I would never make full flash websites they have poor SEO as well as poor accessibility.
The search engines will rank on the follow things:
Title, description and H tags. Relevant content. Links pointing to your website. The links pointing to your sites anchor text.
These things must be done correctly to rank in the top of your industry.
Anchor text and links are currently the two biggest ranking factors on google.
The google sandbox prevents sites from ranking in the Search Engine Results for around 6-15 months if your site was not in googles index previous to 15 months ago and you have more relevant anchor text than your competition then your site is more than likely in the sandbox.
Ways to check your links
To check your links go to yahoo or msn and type linkdomain:youwebsitesname.com this will give you're a guide to how many sites are linking to your site. Another good way to check is to go to google and type allinanchor:Keywordyourtargetinghere this will show you the sites with the most relevant anchor text for your keywords.
I hope this article helps with your flash site I will be writing more specific flash SEO articles in the future so stay tuned.