Boing FMC VNAV Speed Flap Selection Logic
 

Lets say a still wind day on a STAR using VNAV path with the speed intervene window not open (open would also make no difference to the logic I suspect)

The aircraft follows the VNAV path and begins the process of slowing the aircraft for flap deployment.

Does the FMC logic assume Flaps will be taken at limiting speed (say 250kts and decelerating in an 800) or at the up speed.

Hope that makes sense.

The VNAV logic expects to extend the flaps when VANV commands to do so.
Initially VNAV pitches up to bleed off the speed at a preprogrammed rate, experience shows that when extending the flaps at ~20-30 knots prior to UP speed VANV has a continuous deceleration.
Note: until the slats are deployed, VNAV will not decelerate below UP, thus the time taken for these to deploy by selecting flap 1 is the time required prior to UP speed to select your initial flaps.
A continuous decelerate to Flaps 5/10 is taken into account, then further reduction in accordance with your requirements.
Keeping the VNAV PATH engaged without the SPD INTV will allow VNAV to decelerate the aircraft by using the flaps indicator, up to and including your selected approach speed with commanded additive.