Good question.
This is my understanding, and may not resemble the facts.
The BIOS is copied to your RAM when you turn on your system (ever noticed that when you reboot the BIOS skips the memory test and recognizes your drives immediately? this is because the data is already stored in the RAM), to my knowledge this is also the reason why you should NEVER turn off your system if the flash goes bad as that will flush the memory, thus loosing all important data needed for your system to boot.
So if the system reboots during a flash I think it should still work and load the OS just fine, after which you could do a new flash.
However the BIOS is still needed to see if it's a cold boot or a reboot, but I think the part that checks your memory to see if it's a cold boot or reboot is in the boot block sector.
Anyone else care to shed a light on this...and correct me if I'm wrong?