It generally boils down to degree of difference and the intent behind the creation. There have been successful lawsuits against people who've very painstakingly, by hand, recreated another work of art. It's all "original work" -- if memory serves, the object in question was actually sculpture -- but since the intent was to reproduce the original (and it was very successful at it), the original copyright holder won.
There's no set standard, though, so one should always use care when taking direct inspiration from an existing piece. Copyright law was originally written with text in mind, where it's comparatively easy to determine whether a "substantial portion" of the original is being reproduced or not. With 2D works of art that's much less clear.
Or, to bring it back to the original question -- tracing indeed
can be OK, provided the end result is intentionally and noticeably different.
Hope that makes sense. And yes, a graphics tablet is a wonderful tool for any flag or sail maker.
