I've had a similar issue a long while ago, when an older revision of XMP-AAC plugin was taking priority on some FLAC files and either not playing or crashing. So, thirded - extract XMPlay and the FLAC plugin to an empty folder and verify then. If works, add plugins from your main install one by one until you find the culprit.
I was running an older version of the AAC plugin. I upgraded and the FLAC file now works! Thanks wrkq.
For mods and other gaming music, you can also check out Modo, which is way more lightweight than DroidSound memory-wise (about 3-4x), but supports less gaming music formats and other options like Shoutcast streaming.
For web radio, I use TuneIn Radio.
Sucks to have to use so many different apps at the moment! Still waiting for a BASS player for Android!
Some lightweight audio apps I've tried include: -Clean Music (is a directory audio player similar to 1by1) -HikiPlayer (another directory audio player, but with album art and a nice, auto-detection color scheme based on the album's colors)
However, these do not check off the "awesome features" requirement. I've tried Rockbox for Android and while it works, the memory usage increases by about 2x/3x.