Is it possible to edit team flags in RTWC 98

Yea use Fed.

That depends on what you mean...
If you mean national team flags they are editable by using for example EA graphics editor. The national flags in the team select menu though, can be edited but are packed in one packed file but we haven't found out yet how to pack the flags into the file without the game crashing...
This is why for example England, have Denmarks flag in the team select screen but when you play the match, they have the correct flag.

THANKS BUT HOW DO I KNO WHICH FILE TO EDIT

ONE MORE THING IS IT POSSIBLE TO USE FED98 TO EDIT THE FLAGS IN THE TEAM SELECT MENU? IF YOU DON'T KNO TRY IT!

FEd98 doesn't edit graphics.
JEd98 edits jerseys.
To edit flags you have to use other utilities.