The flamethrower does things that just weren't possible in Halo 2. This is, more or less, a living flame. "If you shoot a pillar, the liquid in the flamethrower will adhere to it and burn there," O'Connor explained. "Likewise with the floor and with bad guys. It will cause continual damage to a vehicle. When the flames start to cool down and evaporate, it stops causing damage. If you're lucky enough to keep it on a Warthog, then you will in fact take it down with a flamethrower."
More over here.