Hi to make the flags look like real flags I paint them with PVA wood glue watered down 50% with tap water. When still wet fold them the way you want them and hold with clothes pegs till dry . For the sails I use spray starch and push them into the right shape once dry . Hope this helps my friend. Martyn
Another trick for flags in particular is to spray/paint the material of the flag with 50% white glue and water as described above. However, instead of folding into a shape you like, take a thin aluminum can (say Coke), and cut out a size to match the flag, fold the aluminum to the curved shape you want, then drape the glue impregnated material onto the aluminum. As it dries it will then hold the shape and can later be peeled free.
This method was described by Nazgul on his Vasa MSW build log and it works very well.