Actually, theme does not comply with the WordPress guidelines. It is loading its own jQuery javascript without removing or overriding WordPress 's jQuery. I believe, not only flex slider any jQuery based plugin that loads its javascript files at header would not work. To fix it,
1. Remove following code from theme's header.php
<script src="<?php bloginfo('stylesheet_directory'); ?>/js/jquery-latest.js" type="text/javascript"></script>
2. Add following code to your functions.php
function override_jquery(){
if (!is_admin()) {
wp_deregister_script('jquery');
wp_register_script('jquery', get_bloginfo('stylesheet_directory').'/js/jquery-latest.js', '', '1.7.2', false);
}
}
add_action('wp_enqueue_scripts', 'override_jquery', 100);
This code is not tested but something like this would solve the problem. It actually, remove the WordPress's jquery instance and replace it with the theme's instance.
Hope it will work for you.
Good Luck!