Arkroyal,
Just been doing a little research (I know, I should get out more, but anything's better than ISS) to put your mind at ease.
The only official flag to be used in the north is the Union Jack / Flag / whatever....
The flag to which you refer was officially discontinued when direct rule came in the 1970's. It was based on the flag of the province of Ulster, which has a red cross on a yellow background with the red hand. Of course, with three of the counties of Ulster actually part of the Republic of Ireland, this couldn't be used, so it was 'Anglicized' by putting the red cross on a white background.
So, if the St Patrick's Cross represents the whole of the island, the question is why isn't the government of the Republic kicking up a fuss about its inclusion in the Union Flag / Jack / whatever?
Cynics might say it'll be easier to remove it from the UK flag whenever N Ireland is ceded to the Republic in the next few years than coming up with some compromise right away...
Right, back to DW then...
AA