Making yourself a custom BZ flag/avatar that will show up in multiplayer is actually really easy. You can use any graphics program you want, but I will only be explaining how to do it in Microsoft Paint.
1. Open MS Paint.
2. Go to Image --> Attributes
Set the size to 64 x 32 Pixels, and Black and White, like this:

It will ask you if you are sure about converting to black and white. Click YES. Only black and white are used in monochrome bitmaps, which are what BZ flags have to be.
3. Click the magnifying glass in the toolbox, and click 8x to zoom in close.
If you want, you can press CTRL+G to toggle the grid on and off. When you're done drawing your flag, save it as flag####.bmp, where #### is any number from 0000 to 9999. Copy the flag to your Battlezone\addon folder.
4. Open Battlezone and go to Multiplayer. At the name entry screen, scroll through the flags until your flag shows up, like this:

If I or somebody else made you a flag and posted it on the forum, imageshack probably converted it to a PNG upon uploading it. You'll need to re-save as a Monochrome Bitmap. Simply open the flag in Paint, and go to File --> Save As. Choose Monochrome Bitmap from the drop-down list:

Of course be sure to name the flag correctly, as explained above.

Well, that's it. Have fun!
