I don't know Flex but in ActionScript you have to escape special characters with a / or a \ (not sure which off hand) directly in front of that character.
<mx:Button id="button1" label="<" />
Thanks much for an instant response. It worked.
BTW, this is not an issue with the label property of Button; it's a more general issue with using various XML markup characters in XML attribute values or XML text.
Adobe Flex SDK Team