The Southern people have the loving for the Confederate flags, because it represents perfectly the Southern heritage. But the Northern people often see them as racists symbols (by the historic relationship between Confederacy and slavery). Let's try to make nobody unhappy!
Firstly, see the current Georgia flag:
It's basically the Confederate "first national flag" with Georgia state seal on center. It's not good, but a lot better than horrible previous flag. First problem: it contains a Confederate flag, although this one doesn't carry the same hatred. Second problem: The seal is too complicated to be placed in a flag, and almost impossible of being sewn. My proposal is the flag Georgia used between 1879 and 1902, that remembers the current flag at all.
[Historic flag (1879-1902)]
A lot better, isn't it? Now, I'll try to fix the next flag with a Confederate flag: Mississippi.
The Confederate battle flag is a different case: their connotations in some parts of US aren't the better, and some people feel seriously offended by it. Moreover, the white fimbriation between the canton and the stripes shows that something is going wrong.
Luckily, I won't need to create a new flag: there's a good unofficial flag, dating from 2000 (little before 2001 Mississippi flag referendum):
[Historic proposed flag]
It doesn't seems Confederate at first sight, but it represents the Southern heritage. It doesn't fit the US national flag (red stripes, blue canton), but it's also represented.
Comments are welcome!