Pause the game, then insert any music CD. Unpause the game and you'll be able to enjoy music from the CD for the rest of the race.
To unlock extra tracks finish all four tracks in first place for access to four additional tracks. The new tracks are reverse versions of the original tracks.
Hold L1 + R1 or L2 + R2 and use the D-pad and other controller buttons to rotate and resize the flag. Press Start for a transparent flag.