The problem does indeed exist with the Harmony 650. I have 3 of these and 3 Flircs. All were running 3.0. When I upgraded one of the Flirc devices to 3.5, it became practically unusable. I did change the delay as indicated on the Flirc to the maximum value, which impoved things a bit, but it's not perfect, double clicks about 1 out of 15 times now, and now the entire setup is pretty sluggish compared to the other two HTPCs.
If I could downgrade to 3.0 I would, but after seeing the commentary in this topic, I'm rather afraid to try it as I don't want to end up with a completely non-working setup.