The script on the flag is that of the shahada or Islamic declaration of faith: La ilaha Ilullah Muhammadar Rasululah which means "There is no god but God, and Muhammad is his messenger". This creed is considered holy, and as such the flag should not be used on t-shirts or any other items.
Since it bears the "Word of God", the flag is never lowered to half-mast as a sign of mourning.
The green color of this and other Islamic flags is said to be derived from the fact that the Prophet Muhammed wore a green cloak.
A plain green flag with the shahada was originally the banner of the Wahhabi movement. Upon securing the throne of the Nejd in 1912, Ibn Saud incorporated the sword into this design. This was then adopted as the national flag following the creation of the kingdom of Saudi Arabia in 1932.