The following is from Blogger Help pertaining to the Flag Button:

Here's How It Works
When someone visiting a blog clicks the Flag button in the Blogger Navbar, it means that person believes the content of the blog may be potentially offensive or illegal. We track the number of times a blog has been flagged as objectionable and use this information to determine what action is needed. This feature allows the blogging community as a whole to identify content deemed objectionable. Have you read The Wisdom of Crowds? It's sort of like that.

The entire section is quite liberal. You might want to read it:

http://www.google.com/support/blogger/bin/answer.py?hl=en&answer=42517

Jeff via email from a friend.