This cartoon by Andy Davey from The Sun relates to news that Prince William's fiancée Kate Middleton went on shopping trip in London's King's Road yesterday, where (among other things) she bought 'some discount panties for her honeymoon'. Read article >>
The cartoon shows Kate hanging dozens of Union Jack panties on her washing line (the ones she actually bought were '"Brazilian-style" lacy briefs'). I suppose the joke is that the panties on the line look like the flags which have been put up in the street.
The Sun headline in the cartoon says 'Kate Goes Knicker Shopping'. 'Knickers' (with a silent 'k') is a British English term for what the Americans call 'panties'. Brits also use the word 'panties', especially as (according to Wikipedia) the word 'knickers' 'carries a naughty or playful connotation, which keeps it in use in the media'. Normally, the word 'knickers' (like 'trousers') is not used in the singular, but I suppose 'knickers shopping' would sound rather ugly (not that 'knicker shopping' sounds particularly elegant!) Compare 'trouser ads' (ads for trousers), and Scissor Sisters (not 'Scissors Sisters').
If you say to someone, 'Don't get your knickers in a twist', you think they are getting annoyed or upset about something trivial. This usage is humorous and informal. According to Knickers in a Twist: A Dictionary of British Slang, the American equivalent is 'Don't get your panties in a bunch'.