It's interesting that you need at least 501 karma to be able to downvote comments and posts, but only 31 to flag submissions. Kind of surprising considering that they say a flag is essentially a "super" downvote.
You click the timestamp of the comment, which takes you to a page with more menu options. One of those is [flag]. I don't know how many flags it takes to convert a comment from normal to [flagged], or to dead.
Users with enough karma (I think it's 30?) flag them. You need to click on the actual link to the comment, which is where you can flag (or vouch!) for comments that you think break the guidelines (or were wrongly flagged).