The AAMC has some research (not sure if published or not) that they often discuss that deals with this exact topic. The results of the research shows that those who's results were flagged and were accepted typically had higher GPAs than those that were not flagged. This can be interpreted in two ways:
1. Students who's results were flagged were given special accomodations. Assuming that the AAMC precedent for giving accomodation is very strict (it is), then that same student would have received the same accomodation throughout their college career. On average, that accomodation means that their GPA will be slightly higher than those that didn't receive accomodations.
2. MCAT results of students who's results were flagged were looked upon slightly negatively by admissions, which led to slightly higher focus (transated into higher GPA requirement) for those candidates who would've otherwise gotten in with average MCAT scores and GPAs.
I like #2, but it goes against the medical schools' company line of 'flagging does not affect admissions', so they don't like to mention it.
As for what flagging does. Any research that we've done (and AAMC has done too) shows that additional time on the MCAT yields two things:
1. Better scores as the MCAT is a truely speeded tests, and ...
2. Slightly lower validity of the test as it correlates to later performance on boards and in med school.
Neither one of these should be much of a surprise if you think about how 'speeded' a typical physician's life is.
Hope this clarifies some misconceptions on the topic.
Good luck-
The Kaplan Pre-Health Team