Flashing a cellular phone changes its programming so that it works with another service carrier. With phones designed to use GSM technology, this process is called "unlocking," but CDMA phones go through "flashing" when the carrier changes.
When flashing happens to a CDMA phone, the software coding inside the phone changes, and the phone "thinks" it now works for a different service provider. While flashing a cell phone is legal, it does come with some disadvantages. Once a phone is flashed from one carrier to another, getting it to flash back is often impossible. However, one of the main reasons why people flash their phones is to take their phone from a pricey contract to a no-contract situation with much cheaper service.
In some cases, flashed phones lose some of their features, such as receiving or sending picture messages. Sometimes, factory resets or software updates interact poorly with the first flash, and the user ends up having to pay to have a second flash done. However, for many people, these disadvantages pale in comparison with the cost savings of changing to a no-contract cell service provider without having to purchase a new phone. So if the process works correctly, the benefits for the individual consumer often outweigh the possibility of significant risk.