Hi Chheang!
There is a basic article about creating translation module:
http://kb.x-cart.com/display/XDD/How+to+create+translation+module
As for changing language name, we are going to change it in the default package in the nearest release.
As for a flag image, you can upload the km.png (20x16px) image into skins/common/images/flags/ folder and it will work out with no extra work.