Mac OS X 10.1 has a problem installing the flac binaries from within Applescript. The solution is to install the binaries by hand. Follow the following instructions to do so.

Installing the MacFLAC binaries manually:

1. Open the Terminal (Applications>Utilities)
2. Type "cd /usr/local/" and press return.
3. Type "ls -l" and press return.
4. If you do not see directories called "bin" and "lib", create them with the following commands: "sudo mkdir bin" and "sudo mkdir lib". (you'll have to put in your account password).
5. Type "cd " (with a space after, but dont press return)
6. Drag the MacFLAC application onto the Terminal window. The path should appear.
7. Press return.
8. Type "cd Contents/Resources/Binaries/" and press Return.
9. Type "sudo cp -r * /usr/local/" and press Return.
10. Type "sudo rm -r *" and press Return.

Now the binaries should be installed. Launch MacFLAC and try to use it.