I upgraded the firmware on my flirc, but I do not know if that is explicitely required.
The XBMC plugin was flakey for me for the initial setup, so I installed the latest beta version of the software on my Mac and plugged in my flirc there to get it upgraded, and then moved the FLIRC back to my HTPC. I originally thought that I had to do everything for the FLIRC on the device where i was going to use it, but you can plug it into my computer to configure / update / etc. and then move over to the htpc when it is ready. The firmward upgrade was dead simple, too. Smooth as can be.
I'm a few weeks into this, and the FLIRC + Harmony has made my wife a HUGE fan of XBMC. It is totally usable for her now... it is amazing.
Good luck!