Hmm, my upgrade from Feisty to Gutsy went OK and I can confirm that the flash thing is definitely fixed in Gutsy, just
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sudo apt-get install flashplugin-nonfree
, not sure why yours bombed out.
If you do the clone thing again, you may be able to resize and grow the partition. It depends on the filesystem you used at install, can you paste the output of "mount" if you do that.
Sorting out what options it presents at boot and whether it prompts or not is just a matter of editing /boot/grub/menu.lst