I’m posting this with the hope that it will help some of you who are suffering from this crazily frustrating situation. Here’s how I made my problem go away:
What I wanted configured for shipping was a $5 per item flat rate, with free shipping for purchases of $100+. I’d also set Flat Rate as my default shipping option, and yes, no matter what I kept getting that stupid error. That is, until I named the flat rate. It seems that until you actually define the flat rate with a name it won’t acknowledge it, no matter if you’ve set up how many dollars per item or dollars per order the flat rate is going to be. On the Flat Rate page, underneath the checkbox to enable the Flat Rate, put some text in the box beside “Method Title”. For instance, in a fit of creativity I named my flat rate “Flat Rate”. And there it was–no more error. The name for your flat rate now shows up on the cart page and the checkout page with the shipping total beside it.
Like I said, I hope this helps someone.