Technically, terrorists are defined by their terror value. A person that commits crimes or demonstrations or acts for the purpose of inspiring terror is considered a terrorist.
Here in America, part of patriotism is a strong bond with our flag. We respect it and charish it. SOmeone burning it in an act of hate is a definate call to invoke negative feelings and thoughts. That would make them terrorists.
However, I find it espetially amusing and ironic that one fo the terrorists catches on fire/jumps into the fire, as it's like they lit up America and got burned ^_^
I have personal experience of being on an Honor Guard for flag retirements, and I do know that flag material creates some big, bright flames.