floatflt is now again part of TeX Live (2011) after the license issue which lead to its removal from it has been solved. An update of the existing installation will install it, e.g. try
tlmgr install floatflt or even
tlmgr update --self --all for a complete update.
LaTeX itself tends to be very well backwards compatible and most of its package (written by different people) are it as well. However, a (La)TeX distribution like TeX Live might decide to not include older packages any longer. You should differ between these three things.
You can still get the
floatflt package from CTAN: http://www.ctan.org/tex-archive/macros/latex/contrib/floatflt. Just download the DTX and INS file and run
latex floatflt.ins with both files in one folder. It will unpack the
floatflt.sty package file. Copy this file to
$TEXMF is your local TEXMF structure, like
$HOME/texmf for Linux). You might also need to update the package database (e.g. using
texhash). You can also just place the package file in (all) your document folder(s) instead.
About the license: It can be found in the
floatflt.ins file and states:
You may use the `floatflt' package freely, but at your own
risk. The authors of floatflt.dtx and floatflt.ins (the
complete `floatflt' package distribution) can not be held
responsible for any consequence of your using any of these
files, or files created from these, including hardware,
software, and data damage. You may not make any changes to
the files floatflt.dtx or floatflt.ins. You are allowed to make
changes to the `\documentclass' and/or `\usepackage' commands
of the file `floatexm.tex'. You may incorporate
the code from these files in other files under different
names, provided the original authors are given full credit for
their work and that you yourself take the complaints from the
user(s) of your file(s). You may freely distribute the
files floatflt.dtx and floatflt.ins, provided that you
always distribute `floatflt.dtx' and `floatflt.ins' together
at the same time.
So in fact it is a free license at least for the version which is on CTAN, despite that it is listed there as "Other nonfree licenses".
As a replacement for in-paragraph floats you can use the