What PE says is true. Most often it is a way to display a flag given to the family of a veteran at the veterans funeral. But sometimes it is just an easy way to display our flag that has special meaning.
On our mantle in the picture we are displaying the flag as given to me from the sailors of the USS Tarawa. They flew a flag for me from the ship as a way to thank me for supporting them while they were fighting in Operation Iraqi Freedom. You can see the presentation on my FR homepage. ;-)
The flags given to the next of kin at a funeral are huge and admittedly difficult to display. How do you display a huge flag without taking up lots of wall space or buying a flagpole for the yard, and what if you don't want it to get dirty? You fold it in the traditional manner which makes it end up in a triangle and then put it in a box. :-)
Hope that helps.