The blinking/flickering problem that you have in WoW is indeed a known bug when running crossfire. However, Catalyst 8.12 and further have resolved this issue.
Under resolved issues in 8.12, it states: "Setting shadow quality to high or medium
may cause flickering in World of Warcraft"
If you are experiencing Catalyst issues, you may want to try the 8.12 hotfix drivers
If you are unable to get catalyst drivers to install, make sure both HD 4850's have the same bios version.
If only 8.10 works, 1) run the game in window mode 2) disable crossfire 4) disable Catalyst AI or 4) set shadow quality to the lowest setting
With the brief time i've had with WoW, i can confrim that the latest patch fixes the flickering. Although i am able to see gpu load on both cards, crossfire offers no improvement over a single card, but at least crossfire is compatible now.