Yes, the stock BrickStones SUCK. Mine was also cupping badly by 1500 miles. I did find that over inflating it (45 ~ 46 PSI) made if 'feel' better. However, by then, it was beyond bad.
You can put any tire brand you want on the bike, just stay close to the factory size. The KTRC system uses the ABS speed sensors to determine when to engage (difference between front and rear wheel speed). You would have to have a serious mismatch in tire size to affect that.
Currently, the most popular tires of choice seem to be the Michelin PR3 and the Pirelli Angle ST. I've run the Angles, and the PR2's, and both worked great for me. My next tire purchase will be the PR3s (coming soon, as the PR2 rear is way past the wear bars).