The Red Badge of Courage - Chapter 4

Abstract -
In chapter four, the regiment was talking about rumors they'd heard about the battle. They talked about the man whose hand was stepped on in chapter three, and the generals leading the regiment that was in the battle. Then gunshots flew everywhere and the lieutenant's hand was shot. Smoke filled the battleground and the battle flag fell down. Henry thought as the men fought, and came up with this conclusion: "The composite monster which had caused the other troops to flee had not then appeared. He resolved to get a view of it, and then, he thought he might very likely run better than the best of them."

Response -
I think that the flag falling down symbolized the decreased faith the troops had in themselves. They had been negative when walking around, and mentioned how much they needed to start winning some battles. One thing I didn't completely follow was where the soldiers were in the beginning. They go from talking about the previous battle and what they'd heard straight into fighting in the smoke.

Questions -
In the last sentence of the chapter (quote mentioned in my abstract,) did Henry finally decide A) that he would run or B) that he would run if he wasn't in such a state of shock?
What were they talking about when they talked about the batt'ry?