First of all, define the applet size and its resolution "Width", "Height", and "Resolution". Resolution works as a stretcher value for the internally calculated image. If you want high quality result, set this to one.

Next, either set the "background image" or "background colour."

Then you decide if textscroll function is enabled by checking "Enable textscroll" box.

Once you have chosen the render type, next you configure the rest of the three parameters which affect how the flag waves.

"Wind" -- wind intensity; from 0 (no wind) to 8 (typhoon)
"Curve" - curve level of waving from 1 to 5 (biggest).
"Speed"- speed of waving.

Although I explained "Speed" parameter was the speed of waving of the flag, it's not really precise. All three parameters interact one after another and the result is always rather complex. So, you need to experiment with these values by yourself and find the most appropriate combination for your desired effect.