Portraying the US flag in odd ways and as clothing was sometimes sensitive issue in the past. But in 2012, you can do almost do anything with it, barring desecration.
On the Daily Show on the Comedy Central cable channel, it is used as a patriotic themed mic. Here John Stewart is uses the flag of the United States of America as skirting to a mic, announcing that Americans have a right to be loud and shout.
Steven Colbert with US flag themed bed spread
On The Colbert Report the US flag is the basis of his bed spread. Here, Mr. Colbert is sitting next to radio to see if work is cancelled.