I installed the new iOS for my iPhone 4 and then got the FLAC Player v.1.1 update. It still freezes iTunes for me when copying FLAC files over, and I can't get it to play any 24-bit files (either 88khz or 96). The song titles, cover art, and song lengths will load, but the player just kicks me back one screen if I try to play a Hi-Res song. And I still don't like how you can't delete an individual song within an album from iTunes, you have to delete the whole album.
I discovered Golden Ears, which is far from perfect but seems very promising. I copied about 3GB of FLAC and APE (yes, APE!) files to my Touch 2g and iPhone 4 without any freezing of iTunes. You can view songs by Artist, Album, or All Songs, and the Shuffle mode will shuffle within whichever list you picked a song from. The one APE file I've tried so far works, which I think is incredible seeing as how no other player I know (not even Rockbox'd 5.5g) can play my APE files consistently and with stability.
But there are downsides: On my old Touch 2g, songs will occasionally freeze for a split second for no apparent reason--the release notes says that this can happen with older gen players, and this doesn't seem to happen on my iPhone 4. Also, if you unlock your screen while a song is playing, the song will freeze for a moment too (both iPhone and Touch).
Still, it seems very promising, especially at the introductory $6 price. These are very minor annoyances that to me are greatly outweighed by its usability compared to FLAC Player. If FLAC Player could have a "List All Songs" option, iron out the Hi-res bugs, and allow custom playlists/rating of songs, it would be awesome. I do love that you can delete songs directly on the player.