Creating nice-looking banners is an easy technique, but perhaps most people don't know how to do it. So here's a page describing how. And some examples.
First, design your banner using image software (MS Paint, primarily). Make your image from scratch or take an open-source online one and modify it. Print it out, check it for size, keep doing that until you get the size you want. The image should be just an outline -- white, with black lines. Don't fill in the colors.
Print it out on normal printer paper. Cut it to size and shape, place it on a light table (or just tape it to a window with daylight behind it) and the ink the design to the backside with a very fine pen. This makes it two-sided.
Paint the whole thing, both sides, leaving white areas unpainted.
Glue it to the banner pole.
Shape it with reduced white glue. The best way to do this is in thirds. Take a brush with reduced white glue (about 1/3 glue, 2/3 water, mixed well) and paint the third of the flag that is closest to the banner pole. Get the whole thing wet, both sides. It will become quite flexible. Holding the banner pole figure and the dry part of the banner, distort the banner in an S-shape (seen from above) so it looks like it is flowing in the wind. Then hold it that way (or if you can, brace it against stuff to stay that way) until it is dry. Then do it again, on the middle 1/3 of the flag. Then do it a last time on the last 1/3 of the flag. This takes some practice.
The final result is very durable and attractive. The glue makes the flag semi-rigid, but it is still light and essentially immune to damage from normal play. And it looks damn good.
Some examples following. All the fantasy armies are 28mm; the historical armies (Hussites) are 15mm scale figures.
Flag of the Kings of Gondor
Goblin Raider Flag
Flag of Durin the Deathless
Flag of Thranduil, Lord of the Greenwood
Flag of the Stewards of Gondor