The flag is a reversed Flag of Russia. This is not an accident but an intention: Prior to First Serbian Uprising a delegation from Serbia went to Russia to seek for help. The help is granted, and delegation wanted to show their acknowledgement by asking to use Russian flag as Serbia's military flag in battles. Now, there are two stories: one says that it was granted, but that delegation didn't brought a Russian flag when returning home and forgot how colors were ordered. The second one says that it was not granted and Serbs then used reversed Russian flag in spite to Russians.
In unofficial use the flag is oftenly embrodied with Serbian Coat of arms or just it's main symol, the Serbian cross.
Ratio: 1:2
Instead of the 2:3 ratio shown above, the official flag of Serbia is has a ratio 1:2. This flag is officially used by the Republika Srpska.
Flag of Montenegro was exactly the same as the flag of Serbia until current Montenegrin president, Milo Djukanovic was elected. Then, a set of changes is applied which moved the flag away from Serbian flag: blue color is changed to "blueish" (light blue) and ratio is changed to 1:3.