Falling gravel disappears and reappears after landing.

What are your computer specs?
(If you can't figure these out, put down your Operating System and I can tell you where to look 😉 )

I have had this issue occur on older machines.

Intel(R) Core(TM) i7-2600 CPU @ 3.40 GHz 3.41 GHz
GeForce GTX 560
RAM: 16 GB

Texture packs/Mods installed?
Also OS version?
(MCPatcher counts as a mod by the way. And yes it can screw things up.)

Confirmed on Minecraft 1.5 on Windows 7 (not lag, same PC specs)

Happening on my PC. (3.4GHz Quad-Core, nVidia GeForce TITAN, 8 GB RAM, Windows 7 Ultimate Built)
But not on OS X...? (13in MacBook(2010), 2.4GHz Dual-Core, nVidia GeForce 320M, 4GB RAM, OS X Lion 10.7.5)
This is indeed a strange problem.

I've got Windows 7.
No mods no texturepacks.
Only the 1.5 Pre-Release.

But it seems that it only happens in survival mod.

That does seem to be true.

Loaded a superflat world. Built a platform 5 blocks above the ground. Placed gravel on the side and it fell. Flickered and then stopped on the ground. Typed /gamemode 1 and tried again. No flicker. Went back into survival with /gamemode 0, and flickered when I tried again.

Cannot reproduce.

Gravel, while falling, is an entity and not a block. What you're seeing is Minecraft deleting the entity and placing the block. This is going to be very system-dependent, but it's interesting that FireHunterX only experiences it in survival, and not in creative.

Related to MC-11217 (fixed in 13w11a) ?

Is this still a concern in the current Minecraft version? If so, please update the affected versions in order to best aid Mojang ensuring bugs are still valid in the latest releases/pre-releases.