If your application want to access phone's file system(r/w), or want to access phone's camera, FlashLite alone wont help. [its only possible with a java or python wrapper]
From my personal experience Flashlite is most suited for making quick visual demos/prototypes [within hours].
Right now Adobe is working on Flashlite 3.0 , which is expected to be the most robust release ever, complete with flv video support.
One great thing about flashlite is that, if you build and test on a single device, you can deploy it on ANY flashlite enabled device without any change[subject to some device factors like support for screensavers, wallpapers etc.].This 'build once, deploy anywhere concept ' is unheard of in J2ME development world.
Here is an example for a python implementation: http://code.google.com/p/flyer
Once installed Flashlite acts almost like a flash engine from which you can run swf created for flashlite.
Actually I think you can deploy Java on all Java devices, if you heed certain constraints. But then the application probably won't look very good and will lack some usability features (ie maybe you wouldn't use the soft-keys for navigation or you wouldn't use fullscreen mode, and no sound).
A big problem of mobile Java is the inconsistent font support, though - maybe if flashlights has better standards, it would be a huge improvement. With Java, you don't know how the fonts really look, and measuring the fonts dimensions is usually unreliable, too. So creating a decent layout is really difficult...
good luck, don't let it discourage you.