As Bill mentioned earlier, planning mode (aka project mode) sorts projects, not actions. So all
projects that are flagged will appear at the top when the sorting filter is set to flagged. Actions, however, remain in their relative positions inside of projects.
If you don't have any flagged projects, and you're in planning/project mode, you won't see anything happen with the sorting filter is set to flagged.
To see all your flagged actions sorted at the top, regardless of project, you'll need to switch to context mode.
-Dennis
PS - Oops, I just read back in the thread a bit and see that you specifically mentioned the "Edit->Sort" menu, Brenno. So I take it that you're trying to permanently sort your flagged actions to the top of a project? If that's the case, then please disregard my comments above --
Bill's post has you covered.