I got it to work! But I did confirm on the MiKTeX forum that floatflt is NOT
included in MiKTeX. People will have to install it manually to get the LyX
user guide to work. The procedure was after unpacking floatflt.ins by running
latex on it, I once again copied the floatflt.sty file into the MiKTeX folder
c:/program files/miktex 2.7/tex/latex/floatflt then copied some of the
documentation into /miktex 2.7/doc/latex/floatflt then ran the MiKTeX settings
program and clicked on "Refresh FNDB" and "Update Formats", then loaded LyX
and the User Guide now works.
-Tom