Sure thing. Firstly, arms really are a lot better for the animator with forward kinematics, i.e. animating rotation arcs not using ik handles. You can of course use an IK/FK switch for this type of movement.
Secondly, your 'joint flipping' is NOT a result of deformation, as such, but a result of the skeleton trying to match rotations to your poses during interpolation. Many theories have been penned as solutions, one being quarternian joints, which asre intelligent joints that can analyse the interp propperly. This has been attempted to be included in Maya 4, but simply ain't workin propperly.
So, solutions...if you are using or switching to FK you can set your rotation limits and damping so that it is impossible for the joint to rotate past your defined figures, hence, if it can't roatate one way to match you pose, it must only go the other...the correct direction.
Now, if you really want to us Ik for this, and you are using a Scsolver for your handle, wel, this is not an easy thing to fix with this IK solution. What I can suggest is that you go to bind pose, make a cube at the shoulder joint, group the ik handle to itself and snap the centre pivot of the group to the cube. Now you can constrain the cube to the ikhandle group, and connect the ikhandle group rotation to the cub. Now, you have effectively created anIK/FK switch, as you can animate the rotation of the arm in a controllable fashion, as well as positioning the ikhandle itself within that new local coord space. Ofcousre, setting this up intelligently, with Ik handle for each part of the arm and itelligeent hierarching of the groups will give you really good roatation control using the same theories.
As for IRsolver IK, this is MUCH easier solution. Reason being, you can just use what is called a pole vector constraint. The pole vector, is essentially, the average 'normal' between the jonts within the start and end of the ik handle. I.e., the direction that the rotate plane controlling the joints is pointing.
So...you can select an object that you want to constrain the pole vector to be in the direction of. If you place a cone behind the elbow, select the RP IK handle and shift-select the cone, go constrain>pole vector. Now, if you translate the cone up, you'll notice that the elbow is pointing up towards it. Now, this is not ideal control. So....
Creat a cube and constrain its position to the ik handle or even the wrist joint. Now, make the cube a 'parent' of the cone. Now, when you move the arm, the cone will maintain its relative position. But when you rotate the cube, the cone rotates accordingly, and hey presto, you have direct control of orientation of the elbow.
Now, when you set those key frames, although you'll still get the flipping a little, all you need do to fix it is just make a single keyframe of the cube rotation at a strategic point between poses, and the computer will know not to flip the joint, cos it is following a rotation control from the pole vector constraint.