Sorry for the confusion (my own) on the iTunes interface. It was auto-switching of the sample rate that it does not support. As has been pointed out you need to go into the Audio Midi setup and switch the sampling rate manually, which personally I feel is a PITA, especially when there are options to do it on the fly automatically.
I was not suggesting that iTunes handles FLAC files - it certainly does not (one of the reasons I prefer not to use it). I specified to use Squeezeserver to handle your library which will automatically adjust sample rate on the fly. If you really like iTunes you can still use it to organize your music and just point squeezeserver to it and it will still deliver, but I personally would not recommend using iTunes because of these two drawbacks:
1. No auto-switching of sampling rates.
2. Poor error-correction on ripping CD's (compared to software like MAXX using Full Paranoia, or EAC. I have heard audible differences in files ripped via iTunes vs EAC so prefer to go with better ripping software.
Squeezeserver can use iTunes, and one other music folder to create a library from, so you could conceivably store your FLAC files in a separate folder and all others you want to catalogue in iTunes. I have to say I actually do like the iTunes interface - Apple has user-friendly down!
FLAC is a universal, full resolution format that makes storing and converting files very easy. It is cross platform and very versatile. Software like MAXX can do bulk conversions from FLAC files to several alternate formats in basically two steps. With iTunes such conversions have to be done manually format by format. As said earlier, itunes will not support FLAC at all.