I read a post about the things needed for good handleing; bushings, SFC's, sway bars, shocks and wheels and tires.

The post said that steel wheels can hurt handleing and that you should get alloy's for best performance.

Is this true? Steel wheels can flex?

I was planning on keeping my derby caps and trim rings or go with Cragars, but according to what I read, that would be a mistake if I'm looking for a modern feel.

Any thoughts???

ya. I ain't buying it. Steel wheels are plenty strong, tho I'm not sure where to get a set the proper size... or, if you can find em, if 17x8 / 17x9.5 steelies will hold your derby caps...

I don't think it's so much as a flex issue, but rather the increased unsprung weight which is detrimental to braking/handling.