I have never seen this version of the American Flag before, but after reading this short entry about American Flags at MeFi, I have learned that the American Flag never really had any strict standards concerning its design until about 1942 when the Federal Flag Code went into law. Because of this lax design criteria, many people used the 13 stripes (red and blue) in many variations and the stars were laid out in any pattern and shape (so long as there was one star per state).
Anyway, the flag above is called the Whipple Flag, named after its designer Wayne Whipple, and designed sometime in the first decade of the 20th century. The 48 stars seen here are arranged in a “Great Star” pattern with two outer rings of stars — the first of which represents the states added before the centennial and the outter ring with space for any future additions after the centennial.
I actually like this Whipple Flag design very much!