I think you should see the flagged post in the review queue. You should also be notified when a post is flagged.
Is there anything special about the user you flagged? As the admin, can you see the red number next to the flag icon below the post you flagged?
Can you describe in more detail what you tried?
I assume it was something like
- You created a test user
- This user posted a topic
- You flagged that topic