The real money is definitely in ads. Nobody will pay for shit on the internet. The tide may slowly be turning, eg. how News Corp is starting to charge for access, but I doubt that people who are accustomed to getting things for free will suddenly start dipping into their wallets. You're much better off striking advertising deals when possible. Paid access is just a bonus. Eg. supporter accounts make up maybe 5% of our total revenue. Banners are what pay the bills.
Your question about Flash is a little hard to answer. It's like asking, "is a chainsaw overkill?" It depends on what you need to do. Most people have Flash installed these days so there's not much of a compatibility issue, but it breaks a lot of fundamental aspects of the net like direct links, printing, separation of content and presentation, etc. My general answer would be, no, stay away from Flash, if you need it, it will be apparent. Eg. if you want video support on your site, it's the best option at the moment. But avoid it as much as possible. Consider a Javascript library like jQuery which can provide much of the same functionality in a more compatible fashion.
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I'm a self-taught high-school dropout, but I've been doing web stuff for years, basically since it first went mainstream. I think my original site went online around 1995 when I was in eighth grade ("YthanB and SpecialtyQ's Page of Funk", if anyone can find a copy there's some serious nostalgia value there). Honestly, given how long I've been in the game, I should probably be better by now at what I do. But whatever, I get by okay with the knowledge I have. Just remember my advice isn't definitive or anything like that. It's all IMHO and if you're creative you can ignore everything I have to say and still come out on top.
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