This instructions below will guide you in installing all of the required software (and in which order) to get iTunes to play FLAC files. It works for iTunes version 7.4.1 and up (and Quicktime 7.2.0) running on OS X.
Updated method to play FLAC files in iTunes
1 Download and install Fluke. Fluke is actually an AppleScript, saved as an Application bundle, that includes all of the software used in the longer method.
2 Select one or more FLAC files, right-click (ctrl-click for single-button mouse folks), choose Open With and select Other….
3 Navigate to Fluke, select it and click Open.
4 A window will pop up, some text will fly by. The window will close, and you’ll be presented with the option to import the items (flac files) into iTunes. Click Yes.
5 And your FLAC files will be added to iTunes. That’s it – give them a play, set the tags etc. You’re done!
Longer method to play FLAC files in iTunes
1 Exit out of iTunes and Quicktime if they’re open.
2 Start by downloading xiph-qt-0.1.8.dmg. Unpack it and drag XiphQT.component to /Library/Components/ if you’d like it to be available to all users on your Mac, or /Users/your-user-name/Library/Components/ if you want it to just be available for you. If you’ve ever installed the Xiph QuickTime Component before, drag it to the trash before copying the new version over.
3 Now download flac_import_0.5b1_p0.1.dmg. Open it up and drag FLACImport.component to /Library/QuickTime/ or /Users/your-user-name/Library/QuickTime/.
4 And finally, download set-OggS-0.1.dmg. Unpack it and drag Clear OggS.app and Set OggS.app to your Applications folder.
5 Launch iTunes. You can try loading a .flac file now, but it likely won’t work quite yet. If it doesn’t, drag the flac (or multiple .flac files) and drop them on Set OggS.app. A window will pop up confirming that all of the .flac files have been converted.
6 Now you should have no problem loading the flac files that have been through Set OggS.app into iTunes. You’ll have to tag them manually (tags aren’t carried over to iTunes) but at least they’re working!