I came across an amazing free app that enables you to use iPod, iPad and iPhone with flash based sites such as readingbear, starfall.com and many others that I know people like.
The app is called Rover-The Browser for education.
iSwifter does the same thing--I have it installed and have used it a fair bit with ReadingBear. It works almost as well as a regular browser although there is a little more lag than usual. Still, it's very handy!