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When a post is flagged, it appears on the moderation queue (this feature is updated in the development branch - much better). It does not matter who flags the post.
The post will be auto-deleted if number of flags exceeds a certain barrier (settings -> "vote and flag limits" -> "number of flags to automatically delete posts").
In the updated moderation a moderator can make a choice: "approve post", "approve user and all posts", "decline post and explain why", "block user and delete all posts", "block user, delete posts and block IP address".
When a post is flagged, it appears on the moderation queue (this feature is updated in the development branch - much better). That's it. It does not matter who flags the post.
The post will be auto-deleted if number of flags exceeds a certain barrier (settings -> "vote and flag limits" -> "number of flags to automatically delete posts").
In the updated moderation a moderator can make a choice: "approve post", "approve user and all posts", "decline post and explain why", "block user and delete all posts", "block user, delete posts and block IP address".