No it's not patch meshes. It's a shader.
//Extract from 'DSarena.shader' BY TRaK
textures/DSArena/banner_red
{
qer_editorimage textures/DSArena/banner_red.tga
qer_alphaFunc GE128 0.5
cull none
q3map_tessSize 32
deformVertexes bulge 2 2 1
surfaceparm alphashadow
surfaceparm trans
surfaceparm nomarks
{
depthWrite
alphaFunc GE128
map textures/DSArena/banner_red.tga
blendfunc GL_ONE GL_ZERO
}
{
depthFunc equal
map $lightmap
blendfunc filter
}
}This line;
deformVertexes bulge 2 2 1
Makes it appear wave/flap with the wind.
