The Flag Code, which formalizes and unifies the traditional ways in which we give respect to the flag, also contains specific instructions on how the flag is not to be used. They are:
When the flag is lowered, no part of it should touch the ground or any other object; it should be received by waiting hands and arms. To store the flag it should be folded neatly and ceremoniously.
The flag should be cleaned and mended when necessary.
When a flag is so worn it is no longer fit to serve as a symbol of our country, it should be destroyed by burning in a dignified manner.
When it is displayed from the same flagpole with another flag – of a state, community, society or Scout unit – the flag of the United States must always be at the top except that the church pennant may be flown above the flag during church services for Navy personnel when conducted by a Naval chaplain on a ship at sea.
When the flag is displayed over a street, it should be hung vertically, with the union to the north or east. If the flag is suspended over a sidewalk, the flag’s union should be farthest from the building. http://www.usflag.org/flagetiquette.html
When flown with flags of states, communities, or societies on separate flag poles which are of the same height and in a straight line, the flag of the United States is always placed in the position of honor – to its own right.
..The other flags may be smaller but none may be larger.
..No other flag ever should be placed above it.
..The flag of the United States is always the first flag raised and the last to be lowered.
When flown with the national banner of other countries, each flag must be displayed from a separate pole of the same height. Each flag should be the same size. They should be raised and lowered simultaneously. The flag of one nation may not be displayed above that of another nation.
More on Raising & Lowering the Flag, Displaying the Flag Indoors, Parading and Saluting the Flag, the Flag in Mourning, the Pledge of Allegiance