I've noticed something strange going on, when switching back and forth between default language flag and other (in my case German) Mac OS X 10.4.9 will automatically switch to language of opened document (Entourage) but will not flip back to default once document closes. This was never the case in Panther. It seems like a new idea – but only half implemented in Tiger.

turns out to be a minor bug (albeit intermittent) after all!

did you notice it only with Microsoft applications?

I've tried to recreate same situation with TextEdit, getting similar results. As long as document in alternative language, in this case German, remains open and unsaved, the Finder will flip back and forth between flags. But once I saved the document (titled Grüß) and then reopened it, the Finder will reopen it only in the default language/flag input setting, as defined by user.
But, I guess it would be useful for somebody working with multiple languages a lot if the language preferences could be fine tuned to offer ability for Finder to switch between document language defaults as opposed to user language defaults. It might even help Apple score some kudos with Brussels

yes your were right: there's definitely a bug affecting this in Entourage. The alternative language will override the default language, making the flag "stick" even when viewing a document made with default setting. Only by moving message from outbox (draft) to thrash does situation become resolved in Entourage.