The Confederate Bandana

What is generally referred to as "The Confederate Flag" has never historically represented the CSA as a nation, but has become a widely recognized symbol of the South. It is also called the "rebel", or "Dixie" flag, and is often incorrectly referred to as the "Stars and Bars" (the actual "Stars and Bars" is the First National Flag, which used an entirely different design).

During the first half of the 20th century the Confederate flag enjoyed renewed popularity. During World War II some U.S. military units with Southern nicknames, or made up largely of Southerners, made the flag their unofficial emblem. The USS Columbia (CL-56) flew a Confederate Navy Ensign as a battle flag throughout combat in the South Pacific in World War II. This was done in honor of Columbia, the ship's namesake and the capital city of South Carolina, the first state to secede from the Union. Some soldiers carried Confederate flags into battle. 

After the Battle of Okinawa a Confederate flag was raised over Shuri Castle by a Marine from the self-styled "Rebel Company" (Company A of the 1st Battalion, 5th Marines). It was visible for miles and was taken down after three days on the orders of General Simon B. Buckner, Jr. (son of Confederate general Simon Buckner), who stated that it was inappropriate as "Americans from all over are involved in this battle". It was replaced with the flag of the United States. By the end of World War II, the use of the Confederate flag in the military was rare.

The display of the Confederate flag remains a highly controversial and emotional topic, generally because of disagreement over its symbolism.

Some groups use the Southern Cross as one of the symbols associated with their organizations, including racist groups such as Neo-Nazis and the Ku Klux Klan. The flag is also sometimes used by separatist organizations such as the Aryan Nations. The Aryan Nation also uses the U.S. flag as well as the Christian flag displayed in some Protestant churches.

Supporters of the flag view it as a symbol of southern heritage and the independence of the distinct cultural tradition of the South from Northern government. Due to its ban in some schools and universities that have viewed it as a racist symbol, display of the flag has, in these contexts, also been considered an exercise of free speech.

As I see it, it is no more than a symbol for ignorant hoons and truckies, believing it signifies something like 'freedom' (but from what, I don't know).