I'm a moderator on an SE 2.0 site. We've got 3 moderators and a fairly low volume of flags. Since January, we've averaged about 5 flags per day.
At any given moment, there are probably zero flags in the queue.* I currently have to check the flag count by refreshing the page.†
The site benefits from quick responses to flags.
Therefore, moderators should be able to check flags more easily than by refreshing the page. I suggest email or SMS notifications as a medium with a quicker response time. This would make moderation less tedious and more effective. It would be especially helpful in the very early stages of site creation when flags are even more infrequent.
Of course, the system should be opt-in; I understand that not everyone wants this. For very early sites (or very information-hungry mods and users), posts in /review could also be in the notification system.
* Think about that for a moment. If you're a Trilogy moderator, forget about your flag queue of hundreds of flags per day. On my site, at any given moment, there are probably (probability ~= 80% chance, and it increases dramatically after I see that it's nonzero) zero flags in the queue. This is probably true for most of the Stack Exchange 2.0 sites.
† Yes, the flag count is currently available only by way of a number in a little yellow circle in the header. It doesn't auto-update, so I can't leave /admin/dashboard open and get the flag count from the tab title. It's not publicly available, I have to be signed into the web page via OpenID to look at it. This makes it difficult to use public notification services to check the count. To be explicitly clear: Right now, to check the flag count, I need to refresh the page. That should not be necessary.