I made this post, and Paul commented on it, which caused a longer discussion. Eventually I sent the question to the MSNBC Clicked blog. The answer came in a Clicked post (way down towards the bottom of the post) today:
Will replies: For all matters space I always refer to my man Alan Boyle. He got word from Chris Faranetta of Virginia-based Space Adventures, the company that put billionaire Charles Simonyi on the rocket pictured. Chris confirmed your explanation. Not flares but support structure being retracted.