In case anyone is wondering
Whether to call it the "Union Flag" or the "Union Jack" is a matter of debate by many. According to the Flag Institute, the vexillological organisation for the United Kingdom, "the national flag of the United Kingdom, the Crown Dependencies and Overseas Territories is the Union Flag, which may also be called the Union Jack." It also notes that "From early in its life the Admiralty itself frequently referred to the flag as the Union Jack, whatever its use, and in 1902 an Admiralty Circular announced that Their Lordships had decided that either name could be used officially. In 1908, a government minister stated, in response to a Parliamentary question, that "the Union Jack should be regarded as the National flag" . Nevertheless, the term "Union Flag" is used in King Charles's proclamation of 1634, and in King George III's proclamation of 1 January 1801 concerning the arms and flag of the United Kingdom of Great Britain and Ireland.
When the first flag representing Britain was introduced on the proclamation of King James I in 1606, it became known simply as "the British flag" or "the flag of Britain". The royal proclamation gave no distinctive name to the new flag. The word "jack" was in use before 1600 to describe the maritime bow flag. By 1627 a small Union Jack was commonly flown in this position. One theory goes that for some years it would have been called just "the Jack", or "Jack flag", or "the King's Jack", but by 1674, while formally referred to as "His Majesty's Jack", it was commonly called the Union Jack, and this was officially acknowledged.
Amongst the proclamations issued by King George III at the time of the Union of 1801 was a proclamation concerning flags at sea, which referred to "Our Flags, Jacks, and Pendants" and forbade merchant vessels from wearing "Our Jack, commonly called the Union Jack" nor any pendants or colours used by the King's ships. In contrast, the King's proclamation of the same day concerning the arms and flag of the United Kingdom, not colours at sea, called the new flag "the Union Flag".
The size and power of the Royal Navy internationally at the time could also explain why the flag was named the "Union Jack"; considering the navy was so widely utilised and renowned by the United Kingdom and colonies, it is possible that the term "Jack" occurred because of its regular use on all British ships using the "Jack Staff" (a flag pole attached to the bow of a ship). In other words, a "Union Flag" is called a "Union Jack" when flown from the Jack of a ship. Even if the term "Union Jack" does derive from the jack flag (as perhaps seems most likely), after three centuries, it is now sanctioned by use, has appeared in official use, and remains the popular term.
The Americans also have a "Union Jack" it is the blue box with white stars from the US flag and is flown the same way on US Navy ships.
As for whether the Union Jack can be flown upside down, it actually can.
Again from Wikipedia:
The flag does not have reflection symmetry, due to the slight pinwheeling of St Patrick's cross, which is technically called the counterchange of saltires. Thus, it has a right side and a wrong side up. To fly the flag the correct way up, the broad portion of the white cross of St Andrew should be above the red band of St Patrick (and the thin white portion below) in the upper hoist canton (the corner at the top nearest to the flag-pole), giving the Scottish symbol precedence over the Irish symbol. This is expressed by the phrases wide white top and broad side up. Traditionally, flying a flag upside down is understood as a distress signal. In the case of the Union Flag, the difference is so subtle as to be easily missed by many. Indeed, some people have displayed it upside down inadvertently.
On 3 February 2009, the BBC reported that the flag had been inadvertently flown upside-down by the UK government at the signing of a trade agreement with Chinese premier Wen Jiabao. The error had been spotted by readers of the BBC news website who had contacted the BBC after seeing a photograph of the event.
Union Flag with red bars in diagonals to one side of the white diagonals, such that there is a thicker white border on one side. The red bars are all off-centre as if they had been pushed in an anticlockwise direction.
Right way to fly the flag, assuming hoist to the left
Union flag where red bars in diagonals are moved off-centre in a clockwise direction. This is both the vertical and horizontal mirror image of the previous image.
Wrong way to fly the flag, assuming hoist to the left
This is particularly subtle and takes a sharp eye to notice.
I thought it didn't matter myself until I actually played with the flag at the Victoria Day event, and even then when I messed with pictures it looked like it didn't. However when you flip the flag the hoist stays on the same side, it isn't just rotating the image. Duh.
Keep your sightglass full, your firebox trimmed and your water iced.
In case anyone is wondering