As of now, you cannot compare Flashlite and J2ME. Its almost like comparing Javascript with Java. Flashlite has very limited capabilities . Add to it the limited capabilities of a mobile device.<p>If your application want to access phone's file system(r/w), or want to access phone's camera, FlashLite alone wont help. [its only possible with a java or python wrapper]<p>From my personal experience Flashlite is most suited for making quick visual demos/prototypes [within hours]. <p>Right now Adobe is working on Flashlite 3.0 , which is expected to be the most robust release ever, complete with flv video support.<p>One great thing about flashlite is that, if you build and test on a single device, you can deploy it on ANY flashlite enabled device without any change[subject to some device factors like support for screensavers, wallpapers etc.].This 'build once, deploy anywhere concept ' is unheard of in J2ME development world.
All of the high end (Nokia S80 style) phones can do flash light but there are still problems with it. J2ME runs across nearly all phones but some of the older phones (Nokia S40 style) have very small screens and the Java runtime seems to be painfully slow (the cpu's are quite beefy buy I suspect the memory access is slooooow). Be aware that despite it being Java there are quirks across the 50+ mobile phones that are in common use around the world. There are a lot of small companies that specialize in testing across this range though.
j2me is much more widespread. You could even give Hecl a whirl to put together a prototype ( <a href="http://www.hecl.org" rel="nofollow">http://www.hecl.org</a> - just remember to get it from subversion rather than the SF download).