The technical trick of Skyfire is that it's a proxy browser. The Skyfire app itself isn't a full browser. Instead, big Skyfire servers elsewhere process Web pages, including all the media and browser formats -- like Flash, Java, and Ajax -- that a normal desktop browser would handle but that most phones can't. Then it streams data to phones, which the mobile half of Skyfire displays. To the end user, it looks like a browser, but the mobile app is just one part of the product.
This means that Skyfire can do things on mobile phones that mobile browsers, including Safari and Opera, cannot, at least not without bogging down the phone. The danger is that the Skyfire servers themselves will bog down, due to over-use, and ruin the experience for mobile users. This is the experience I had with Micrsoft's Deepfish, a proxy browser project we covered last year and that appears to have gone dormant. Bhandari told me the service is "built to scale," and that "once at escape velocity," the company can plug in additional servers to handle a growing user base. He would not reveal the technical underpinnings of Skyfire beyond that.
Sounds great, but can the server load be handled by a small start-up? Private beta is upcoming, and you can get into it at the Skyfire site.