At 6' and 200lbs with a non-typical cyclist physique I find significant lateral frame flex at the bottom bracket unacceptable, by significant I'm talking auto shifting and the big ring rattling both sides of the front derailleur cage. While this may not consume power and cause the bottom bracket shell to glow red it is quite an annoyance. I have a couple of bikes that exhibited this phenomena and converted them to perfectly acceptable, to me, fixed gears which seem no slower in road use than my short and stiff track bike. This seems to go along with the theory that flex does not lose significant power.
As for frame flex improving the ride, now IMHO that's snake oil. A bike frame is pretty much a truss vertically and deflection is minimal at best. Tires, inflation pressure, wheelbase, headtube angle, where you sit and where your hands are, make the difference for ride feel. I'd bet that the Raleigh 3 speed used as an example of stiffness earlier seems "dead" because of the sixty something degree frame angles, the four foot wheelbase and the 35+lb weight.
As for the updated 19lb PG tubed Nishiki with modern components it would have a slight advantage over the listed time frame bikes in competition, but not due to stiffness. To tell why would be very bad indeed. ;-)
Marcus Coles
London, Ontario, Canada.