Nope, you should see a red duster, not the blue ensign (that pic is the Aussie Flag btw). Ok 2 things to look out for.
1)
My zip tool has a sometimes habit of putting a folder into a folder, so it looks like this :
Flag patch/Data/Data/Libary/Flags.dat
When it should be :
Flag patch/Data/Libary/Flags.dat
Make sure that you didnt copy an paste the Data/Data set up into the game. It should be just the 1 data folder.
2)
Even tho I said you should be able to do this while on patrol it may not have taken properly. After your next DOCK save goto the museum and load up the Aussie and Kiwi ships and check the flags, if they are red instead of blue then all is well. If not redo the patch and make sure that the above double folder bit isn't in your game and reload museum and check again. It should be all sweet.
(while in the museum take a gander at the new plane markings as well
)