Dive flags are required in many, if not most, states. Florida requires down flags, even for snorklers. On my last trip I ended up with about a dozen snorklers swimming around me on a free diving excursion off the jetties at St. Andrew's State Park. It seems I was the only one with a flag, and they were all getting hassled by the Marine Patrol (I didn't see anyone get a ticket, but a couple of kids said they saw that happen earlier in the day).
I have a 25yr. old "Florida Global Divers Flag", which is still in good shape. It is comprised of a fiberglass rod with a lead weighted base and a styrofoam float (it is larger than some of newer flags I've seen of similar construction.) Still, in a really bad current, the flag will submerge, which can make it pretty "draggy". I would think a light, inflatable float would be better.
On most of my shore dives, I'll admit to being the only one with a flag, which means I always get stuck dragging it around. As for line handling, I use a homemade line handle made from a electric cord organizer (like a big kite handle, but much stronger). I can handle it easily one-handed and seldom have a problem with snarls or tangles. What problems I do have are related to the flag getting "sucked" into rock jetties or other obstructions and getting hung up. When you are down 70' or more, coming up to free the float is more than just a simple hassle, since it often requires a safety stop.
I can lessen the chances of these snags by keeping the line short as possible, but snags still happen.
The float comes in really handy on drift drives (like off West Palm), but when diving off an anchored/moored boat, I usually just tie it to the stern to supplement the flag flying off the boat.
One note: NEVER tie the flag (or any line) to your body. That is a bad thing.
Once, while diving Lake Travis several years ago, something hit my flag hard enough to give me a serious tug. I held on since the flag was only bumped, but then slowly surfaced to see what the problem might be. I could hear/feel jetskis nearby on the surface, but I didn't judge their distance well. The morons were using my float as a "turning mark" while they raced each other. Just as I surfaced, I got "bumped" from behind by one of the PWC's as turned near my float and skidded backwards into me. It was only a tap, but I was pretty darn p'o'd.
"Whoa, Dude", the little-drunken-redneck-teenager said. "You shouldn't be swimming under that bouy. We're using it, man."
For that reason, I believe it is justifiable to shoot anyone on a jetski. (I cheered out loud when readind one of Jimmy Buffett's characters used a stinger missile on one in his first book).
I HATE jetskis and the usually drunken idiots who ride them, but that's another thread altogether.