To edit flags in BF2 just download the free program GIMP and you can browse the DDS file using
the plugin. So you can replace them like the flag below ( EuroAnarchist PAD ) forces try to be original and don't take too many elements from the previous flag designs and colours the Euro Anarchist flag is just a demo I will do more with that one later ( click on images to see larger ones ).

Here is a flag i made for Operation Temple Rescue a mod for Battlefree Thailand you can make the camo colour pattern using GIMP as well the parachute can be made from a half sphere ( I used a geosphere ) or Milkshape helmet see here

This flag was created by me with a EU theme I call it the Mechanarchist Union flag.  The MEC ( Middle Eastern Coalition Against Oil Dominance ) with a Arab spring flavour.

PAD Infantry Peoples Armoured Division Patch

Here is the PAD eu  tile-able dress camo for uniforms and vehicles

Here is my PAD arm patch from another game mod Battlefree Thailand ( not finished )

In action here in Battlefield 2

To get you started download GIMP here

Now you need the Gimp 2.6 DDS plugin here called 
unzip it you will find dds.exe and put it in the sub directory of your Gimp program
 called plugins usually located in this trees folder
C:\Program Files\GIMP-2.0\lib\gimp\2.0\plug-ins

and open the file battlefield achive file in you tree ( here it is with C drive root )
C:\Program Files\EA GAMES\Battlefield 2\mods\bf2\
go inside the archive and find the file staticobjects/common/textures/
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