Issue 158: Incognito window, not so 'incognito' with Flash content
http://code.google.com/p/chromium/issues/detail?id=158

Comment #8 by bobbias:
http://crypto.stanford.edu/websec/chromium/chromium-security-architecture.pdf

I would heavily suggest reading this paper, it explains in great detail the  
security
and architecture of chrome.

Here is an excerpt from the section talking about plugins that describes  
what is happening, and how to deal with it:

In order to maintain compatibility
with existing web sites, browser plug-ins cannot be hosted
inside the rendering engine because plug-in vendors expect
there to be at most one instance of a plug-in for the entire
web browser. If plug-ins were hosted inside the browser
kernel, a plug-in crash would be su cient to crash the entire
browser.
By default, each plug-in runs outside of the sandbox and
with the user's full privileges. This setting maintains com-
patibility with existing plug-ins and web sites because plug-
ins can have arbitrary behavior. For example, the Flash
Player plug-in can access the user's microphone and web-
cam, as well as write to the user's  le system (to update
itself and store Flash cookies). The limitation of this set-
ting is that an attacker can exploit unpatched vulnerabilities
in plug-ins to install malware on the user's machine.
Vendors could write future versions of plug-ins that op-
erate within Chromium's sandbox, to provide greater de-
fense against plug-in exploits. Chromium also contains an
option to run existing plug-ins inside the sandbox. To do
so, run the browser with the --safe-plugins command line
option. This setting is experimental and might cause in-
stability or unexpected behavior. For example, sandboxed
plug-ins might not be able to update themselves to newer
versions.




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