- the flag base is represented by:
+ a small translucent team-colored team-player-model model, say half size, floating in the air and playing the running animation, this model could maybe face towards the closest member of the oppposite team. when someone steals the flag this model would disappear.
+ a low profile flag-base model, that sits on the floor to mark the location, this could maybe even be a decal.
An additional flag carrier effect should now be quite feasible with GLSL support in svn. I have some work left on the supporting code for managing GLSL programs, but once this is worked out, I'll begin adding exotic shader effects like what you describe.
I think your ideas are quite good. If no one puts forth a good looking flag model before long, I'll give this idea a shot.