Elizabeth,
We are also having issues using (4-bit) trace, but we are using Keil uVision with MDK 5.22. I made a post about it here:
TWR-K65F180M no trace synchronization on 4-bit port
You may have already tried some (or all) of the the corresponding steps in IAR. Were you also having issues with not being able to see data in either the Event Log or Event Viewer? I have not seen anything suggesting that it's not possible to use with higher clock speeds, but if I do I will be sure to let you know.
Adam