grab the latest edition of the flags package here : http://www.famfamfam.com/lab/icons/flag ... _icons.zip
In this flag pack (the default flag directory for this MOD) you will see a few extra images (England, Scotland, Wales, EuropeanUnion and Catalonia).
you will have to rename them to your own alpha values.png, upload and add them in the control panel.
The alpha codes do not permit using en or eu.png as a distributable package (as far as I understand) for this MOD and a "Country Flags - User Edition" coming soon (see the reference here if you want to know more on the alpha codes : http://en.wikipedia.org/wiki/ISO_3166-1
To correct the group issue, please try this : http://www.phpbb.com/community/viewtopi ... 5#p7208035
hope that helps you,