The flag should never be disrespected, nor desecrated.
Frankly, I don't believe that the American flag is desecrated by falling upon American soil. Its another thing entirely to become soiled in dirt, but the specific act of touching hallowed American soil upon which countless heros blood has been soaked into, in no way, shape or form is desecrating. I believe that to be true regardless of where the flag touches the ground (say Iwo Jima, or the shores of Tripoli, or Normandy), but would not be true say in Moscow, or Vietnam. If the flag hits the ground anywhere in the continuous United States of America, including Puerto Rico, Alaska, Hawaii, it is not desecrated. If it becomes soiled that's a different story entirely, as throwing the U.S. Flag through the wash and rinse cycle is not honorable IMHO. Merely touching the ground in and of itself is not desecrating, but should the Stars & Bars fall to the ground, for example in a location like Qatar (or Taiwan, Japan, Britain, Iraq, etc.) it would need to be destroyed.
The flag should not be flown at night unless it is illuminated.
Flags that have become tattered or bleached should be properly relieved of duty (not disposed of). The could be relieved of duty in a solemn hibatchi ceremony. Frankly, I see nothing wrong with throwing a U.S. flag into a mulcher, mixing with some American compost to be used to grow stuff in America. That's honorable. What is dishonorable is to relegate an old flag to a landfill.