The problem still persists and there is a good description of it here and here

My idea of solving the problem is simple:
Since nobody has reported that falling foams have caused any problem to their designed function-insulating the fuel tank, I presume this is not a problem. So the foam is allowed to fall during launch as long as it does not damage any other part of the shuttle.

I want this site to be dedicated to the discussion on how to prevent the falling foams from damaging the shuttle.

One of the ideas of achieving above would be instead of making the foam stronger (so it is less likely to fall during launch) it should be made weaker (so it shatters on contact without damaging anything).

Another idea along the same line is to have a mesh on the outside of or embedded in the foam that would cut through any part of the foam that is falling. This will ensure the falling foam pieces are sufficiently small so no damage can be done. This idea will allow the foam to be strong when attached but sufficiently weakened when falling.

As it turns out,an earlier article had already discussed proposed solutions similar to the above. They were all rejected on the ground that it would have taken a lot of research and too much time to verify and implement. So the problem continues.