I' haven't been flagged during my travels, and I go all over the place... I had assumed that they have some sort of clearing house for fraud information across card companies. Since they get the cities that you're ticketed to travel to, it makes sense that they would "know" that you're there.

the only time I ever got the fraud call was in berkeley where I'm living atm. I had bought breakfast with my card ($3).. and then later in the day I bought the iPod hebrew software from a company in Israel. The second that transaction went through my phone rang. I was impressed with the speed.