Hello everyone.
I was a bit surprised to see discussion of the Flashback 2 here, but I am pleased to see some interest. I am one of the people that helped design the unit for Atari.
Let me see if I can address some of the comments mentioned here so far. For starters, someone mentioned hacking. Most everything mentioned previously by CRSDAWG is correct. We went back to the drawing board and designed a "2600 on a chip" based off of the original Atari designs from the 70's. There is a whole long drawn-out story behind the NES hardware in the original Flashback, and I can't really go into any details about it. Suffice it to say, Atari listened this time and allowed us to design system with the enthusiast in mind.
All of the traces to hack in a cart port are built onto the board. The degree of 2600 compatibility we have achieved has been very high. Only a few select games we tried (Berzerk, Star Raiders, and a few others) won't function correctly on the new system. Most all other carts run 100% as they originally did back in the day.
I'll point you in the direction of some hacking projects that have been done already. The first is from Curt Vendel, who is my "partner in crime" and the Lead Engineer on the Flashback Engineering Team. The second is from a guy named Bob Colbert. Bob even went so far as to hack in original 2600 switches....
http://www.atarimuseum.com/fb2hacks/index.htmhttp://members.cox.net/rcolbert/I love Bob's pictures of an original 2600 Defender cart running on the FB2.

The video output has been greatly improved. No more TV switchboxes for this unit as the system outputs crystal clear composite. 2600 video has never looked better.
Someone made a comment about joysticks. They may look 100% identical to the originals, but the guts are slightly different. They should last a lot longer, and you will notice a difference when you play with the new sticks.
The Flashback 2 is also compatible with original Atari paddles, and even the Atari trackball for games like Missile Command. The FB2 joysticks will also work fine on original Atari 2600 units, Atari 8-bit computers, etc.
The first units off the assembly line went to WalMart a few weeks ago. I would be suprised if you could find one in a WalMart store now. I have been keeping an eye on the WalMart stores in my area around Philly, and they all sold out almost immediately. The units should be available in large quantities in Best Buy, Target, CompUSA, etc. very shortly.
Flashback 3 is already on the drawing board!!
Mike Stulir
Flashback 2 Engineering Team