After I upgraded my iPhone 4S to iOS 6, one of the big issues I was faced with was flagging emails in my personal domain (which is hosted by google apps). This is set-up via Exchange. Turns out the problem is manically simple: the optional domain setting. Under Settings > Mail, Contacts, Calendars > "account name" > Account, after "Email" (which is how you name this guy) & "Server" is "Domain". After changing this from blank to "google", the ability to flag in this account came right back.
iPhone on good health! I'll add more about my iOS 6 update journey soon.