Not at all. Actually I thought it only changed when you changed language settings. But I'm obviously wrong. Hmm I requested something similar some time back. At least the idea being to show where the hosts are from.
Perhaps it shows where the UltraPeers you're connected to might be from. I don't know. I'm in Australia but my LW shows the USA flag. If you click on the flag you can change language options. I don't see any option for the english flag. You're using LimeWire beta or FrostWire beta? Have you checked http://www.limewire.com/english/cont..._history.shtml