How do I get the American Flag back on my menu bar?
in the Language and Text, under Input source, you need to select one or more input sources; you also need to select Keyboard and Character Viewer on the top of the input source list.
As far as I know, the flag is displayed only when you select more than one input source; differently, the icon you see is a generic one.

This is the icon you see when just an input source is selected.



This is the icon you see when you selected two or more input sources; in this case, the selected input source is "Italian Pro."