FastCraft has definitely improved the situation. First I tested without it in single player, got the usual pause every few blocks moved, 1-2 sec each, sometimes up to 10. Installed FastCraft, and still get a bit of a hiccup about as often, but they are much, much shorter - barely noticeable in fact. So I don't think FastCraft solves the underlying vanilla bug, but it improves chunk rendering to the point where it isn't as painful.