Important note: this version removes most of the default views provided by earlier versions of Flag module. If you'd like to preserve the default views provided by Flag, run update.php immediately after upgrading. This upgrade does not affect any views you have created yourself. See http://drupal.org/node/333984 for details of the removed views.
If you've themed your Flags, be absolutely sure to update your code or .tpl.php files to use two dashes instead of one.