It is used to describe things that are superhumanly amazing, and awesome, pretty much THE best thing EVER.
It can also be used as an alternate form of the word "go" when playing games.
Typically it is best used to describe activities that you want kids to get REALLY stoked about.
Ok kids, when I say "flashtastic" you are all going to spin around 20 times and then begin!!!
Those tater-tots are flashtastic. totally.