MySQL gives you the ability to run queries delaye. Example: "INSERT DELAYED INTO...", this will cause the query to only be executed when MYSQL has time to take the query.
Based on your input, it sounds like you are using MyISAM tables, MyISAM only support table-wide locking. That means that a single update will lock the whole database table until the query is completed. InnoDB on the other hand uses row locking, which will not cause SELECT queries to wait(hang) for updates to complete.
So you have the best chances of a better sysadmin life if you change to InnoDB :)
When it comes to replication it is pretty normal to seperate updates and selects to two different MySQL servers, and that does tend to work very well. But if you are using MyISAM tables and does a lot of updates, the locking issue itself will still be there.
So my 2 cents: First get rid of MyISAM, then consider replication or a better scaled MySQL server if the problem still exists. (The key for good performance in MySQL is to have at least the size of all indexes across all databases as physical RAM)