Thanks for the help Uwe, but I still am having problems.

About your suggestion - personally I think MiKTeX was installing
packages fine (it never complained and seemed to complete the process
whenever I clicked install package in the package manager). BUT it
never showed floatflt.sty in the MiKTeX package manager.  Its NOT in
the package list.  In my very uneducated opinion it seems like MiKTeX
has decided to remove floatflt.sty from there package list because its
so old.  CTAN shows a date of 1998 on floatflt.sty, whereas the oldest
package in MiKTeX available in the MiKTeX package manager is from
2001.  This is just a theory I have, could be totally wrong. :)

So I've tried a bunch of stuff since then:

1. uninstall both MiKTex and LyX and reinstall them (using miktex
basic installer and lyx standard installer).  I encountered new
problems this time with the User's guide where the error message was
something about scrbook.class (this is from memory so I may not have
it exact).  I found online help about this suggesting koma-scsript was
the problem.  But now when I tried installing new packages they didn't
seeem to install, because after restarting lyx it would always try to
reinstall what it had tried to before.

2.  Reinstalled them again using miktex network installer and lyx
alternative installer.  I also ran miktex update this time (I don't
think I did that before).  Now, I am back where I was originally.
- There is no package containing the file "floatflt.sty" available in miktex.
- lyx user's guide complains that the file floatflt.sty can't be found
and makes no attempt to install it (as before)
- the style file floatflt.sty is not shown in the list of styles under
Tools->Tex Information
-An example tex file that came with the floatflt package from CTAN can
be compiled into a pdf in LyX, but only after I edit the file
drastically leaving only a single "floated figure".  It does have a
usepackage{floatflt} in it.  It works in lyx, producing a figure with
text floated around it.  I included the tex code below.  I don't know
why this file works and the User's Guide does not.

Here is the highly modified file version of a file that came with
floatflt package on CTAN:

%%
%% This is file `floatexm.tex',
%% generated with the docstrip utility.
%%
%% The original source files were:
%%
%% floatflt.dtx  (with options: `exempelkod')
%%
%% Copyright (c) 1994-1998 by Mats Dahlgren <[EMAIL PROTECTED]>.
%% All rights reserved.  See the file `floatflt.ins' for information
%% on how you may (re-)distribute the `floatflt' package files.
%% You are not allowed to make any changes to this file without
%% explicit permission from the author.
%%
\documentclass[11pt]{article}
\usepackage{floatflt}
\begin{document}
\centerline{\Huge{ The Tale of \textsf{floatflt} }}
\bigskip
\normalsize

This is a demonstration document for the use
of the \textsf{floatflt} package.  It contains several
floating figures and tables with captions explaining how
they were called.  At the end, a
\verb+\listoffigures+ command
is used, resulting in the desired lists.  For more
details on how to use the \textsf{floatflt} package,
please run \LaTeX{} on the file \texttt{floatflt.dtx}.

The following work by Edgar Alan Poe was retrieved by
anonymous ftp from \texttt{ftp.funet.fi} in the
directory \texttt{/pub/doc/literary/etext} where it is
found in the file \texttt{telltale.poe}.  Only minor
\LaTeX\ adaptions have been done, besides the inclusion
of floating floats.

TRUE! nervous, very, very dreadfully nervous
I had been and am; but why WILL you say
that I am mad? The disease had sharpened
my senses, not destroyed, not dulled them. Above
all was the sense of hearing acute. I heard all things
in the heaven and in the earth. I heard many things
in hell. How then am I mad? Hearken! and observe how healthily, how
calmly, I can tell you the
whole story.

\begin{floatingfigure}{60mm}
\begin{center}
The first figure
\end{center}
\caption{The environment with.}
\end{floatingfigure}

It is impossible to say how first the idea entered
my brain, but, once conceived, it haunted me day
and night. Object there was none. Passion there
was none. I loved the old man. He had never
wronged me. He had never given me insult. For
his gold I had no desire. I think it was his eye!
Yes, it was this! One of his eyes resembled that
of a vulture -- a pale blue eye with a film over it.
Whenever it fell upon me my blood ran cold, and
so by degrees, very gradually, I made up my mind
to take the life of the old man, and thus rid myself
of the eye for ever.

\rightline{\ensuremath{\mathcal{END}}.}

\listoffigures

\end{document}
\endinput
%%
%% End of file `floatexm.tex'.


Again, thanks for your help.
-Tom

On Feb 1, 2008 8:29 PM, Uwe Stöhr <[EMAIL PROTECTED]> wrote:
> Tom schrieb:
>
> > When I try
> > to view it using any method (dvi, pdf, ps) it says:
> > LaTeX Error: File `floatflt.sty' not found.
>  > ...
>  > I tried installing that package using MiKTeX 2.7 package browser, but this
>  > package is not there.
>
> There was a bug in MiKTeX that no package could be installed. This should now 
> be fixed.
> To get LyX working, open an internet connection and the reconfigure LyX (menu 
> Tools -> Reconfigure).
> Then the missing LateX-packages will be installed (so reconfiguring LyX could 
> in this case need some
> time).
>
> regards Uwe
>

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