I have a webservice returning .flv file, it has to be played in iphone application, how do i play a .flv (flash file) in iphone? Does anyone has faced this scenario? Programmatically is it possible to convert to some format and play in iphone? Thanks.

IPhone doesn't and judging by the Apple official statements won't ever (or at least in the forseeable future) support flash content. Converting the content to another format on the server side should be easy to do and would allow content playback on an iDevice.