That was very common: You could also see during the existence of Soviet Union flags with the heads of Marx, Engels and Stalin (and sometimes other highly placed leaders of several socialist countries), either individually, or grouped together in one flag. This practice came to the outside of the Iron Curtain, and several communist and ultra-leftist movements and parties used to display these flags as well, sometimes with this or that head added. Maoists often added Mao, Trotskists often added Trotsky, etc. This happened at least in Western Europe, but I suspect it also happened in other areas, such as Latin America. Jorge Candeias, 19 February 2002
Not only on Soviet flags, but of flags used all over the socialist world, and also by left-wing movements and parties in the West. You'd probably be able to find flags featuring all the major leaders (except, perhaps, Fidel Castro — never saw a flag featuring Castro. He's usually replaced by Che Guevara), either alone or in groups. Jorge Candeias, 23 February 2002
Today there was a protest in Sydney city against the World Trade Organization meeting in Sydney tomorrow. About 1500 people attended the illegal (but tolerated) event. The march was led by left-wingers, who flew a large number of red flags, some with the image of Che Guevara printed on them, and a single black flag for the anarchists. Miles Li, 14 November 2002
I uploaded several photos from peace demos this week in Munich (29 March), including a Che Guevara flag with the inscription "Hasta la victoria siempre." Marcus E.V. Schmöger, 30 March 2003
I don't know where it came from, but the Che icon emerged soon after the killing of Che Guevara in Bolivia and the public display of his corpse by the Bolivian dictatorial authorities of the time. Che became a sort of martyr of revolution against oppression, and therefore his efigy became a symbol cherished by several revolutionnary left-wing militants. It was never officially adopted by anyone, to my knowledge, but there's a whole iconography around it, including T-shirts, pins, flags, literature, caps, etc.
Regarding flags, there are a number of different variations, but the ones that seem to predominate in a somewhat standard fashion are the plain red flag with Che and the red Che efigy over a background of the Cuban flag, with or without the "Hasta la victoria, siempre" slogan.
I have seen such flags a little all over. For certain, in images coming from Portugal, Spain, Brazil, Russia, Italy, Cuba and in German images. Other variations of flags with the Che icon were reported by me a few days ago in the list, found in Yahoo photos of demonstrations in Argentina and Palestine. Jorge Candeias, 8 April 2003
This design and usage (red flag with the usual likeness in black with the inscription "Hasta la victoria siempre" under it in black capitals), has been attested locally in Sweden. This seems to confirm the worldwide widespread design and usage already mentioned. António Martins-Tuválkin, 15 July 2007
The motto on the flag reads "Hasta la victoria siempre," or "To victory always." Esteban Rivera, 15 July 2007