How is Picnik implemented?

Yes, Picnik is implemented on the Flex 2 framework. We use the Flex Builder IDE and the combination works very well. It's comparable, though not as mature, to development environments like Visual Studio. Flex Builder includes a GUI builder for constructing user interfaces that generates MXML (an XML-based declarative language for defining objects, their properties, event handlers, and relationships) which in turn is compiled into Actionscript, then bytecode which is packaged in the SWF file we ultimately deploy to our servers.

Compared to the Flash IDE which feels like it was designed by designers for designers, Flex/Flex Builder was designed by developers for developers. While this means developers will be WAY more productive using Flex we were concerned at first that it would shackle our graphics designer and limit our ability to create the experience we wanted. That has not turned out to be a big problem. Peter, our designer, was very quick to pick up MXML (his web development HTML/CSS experience certainly gave him a leg up) and though I'm sure he feels like he's in a box at times (darn chunky TileList scrolling) we've been delighted by the results overall.

I would definitely recommend that anyone who has been frustrated by the constraints or downright orneryness of traditional web development give the free Flex Builder trial a go. It's fun!