Ok, Question One...

The reason why flash might be a bad ideal is SEO rankings. Flash is hard to get listed in search engines. But of something like a news box, this content will probably change everyday, so even if it were done in XHTML/CSS the search engine would not list the content everyday. You could fix that issue with an archives section. That is the only thing I find to be wrong with flash, flash is a great tool for website designs, IF IT IS USED FOR GOOD!!

Question Two...

You will find that websites very, some news boxes will be done in flash, as this would be a much more professional way to accomplish a news box, but then their are others that use XHTML/CSS, and even some that use MySQL, and PHP.

Question Three...

Well I actually have a some what bias opinion as I am a flash expert, and a moderator of the flash forum here at webforumz. But I would personally do this task with in flash. You could make a much more professional news section, then you could with…say XHTML/CSS. Also I would make the headlines on the homepage be flash, you know the news box, should just contain the headlines, then they click the flash link, and it will go to an XHTML page. This will help with your search engine rankings, allot. Make the news box contain just the headlines, and if they are interested they can click for more detail, and it takes them to the full story, that is an XHTML page. This is again what I would do, and is not the only way. There are millions of ways, but the best way is up to you.

Let me know if you need any more help. Also Good Luck!!