The simplest thing to do is keep all of your countries/flags in a related table (see example, counties table)
Then on your records table (related to the countries table by a field of "country") have a drop down with all the values of country names.
Then you can have an auto-update container field with an auto-enter calculation of Countries::flag.
See the sample I made, really easy!
flags.fmp12.zip 199.0 K