Here is a third look at the flag test. If the flag is jagged, the 480i/480p conversion and upscaling is considered below average. As you can see here (especially if when you click for the larger view), although the interior stripes and the outer edges of the flag are jagged. This result indicates below average deinterlacing (480i/480p conversion) quality for the Yamaha neoHD YMC-700, which regards to this test.
By proceeding to following photo in this gallery you will see the results with regards to the differing position of the flag as it waves.