Having been OIC of hundreds of military funerals in my LT days, I think I am somewhat qualified to speak here. Be advised, though, that traditions vary and what we did on my teams was sometimes different form what other teams did within our same unit.
Before presenting the folded flag to the OIC, the NCOIC (who is the Pallbearer directly to the front and right of the OIC) inspects the flag. The standard routine here is to make 4 1/4 turns. After finding the flag satisfactory, the NCOIC and OIC face each other, step towards each other and the flag is handed to the OIC.
As Paul stated, the flag is always presented with the flat side towards the person it is being presented to. Thus the OIC then must make 2 more 1/4 turns before moving off to present the flag to the NOK.
My guess is that they put 3 spent blanks from the firing party in the flag. How I did it is I waited until after the ceremony, when the soldiers were policing their brass, then approached the next of kin with my less formal condolences (aside from the official script spoken upon the presentation) and offered to place the brass in the flag. I though this a nice touch and it made it less obvious that we already had brass set aside just for this. Maybe in your case the NCOIC had a chance during the ceremony to collect brass. It is likely they used prepositioned brass (assuming that it was brass). Heck, we did too, we even brassoed it up - but putting brass in the flag when it was obvious nobody had picked it up from the ground seemed kind of silly to me. Plus, the widows or other NOK always seemed to appreciate the added gesture and understood what it represented (one round for each volley).
Not to toot my own horn, but several funeral directors commented to me that the way we did it was the best they had seen. Some even remembered me months later as I got pulled for the duty again and made similar comments that our team was the best.
Nowadays, you are fortunate to have had a full crew. I had to do many funerals the last time I pulled that duty with only myself and an NCO. The two of us folded the flag; I stood alongside the next of kin with the flag for the duration of the ceremony. Then the NCO disappeared to play recorded volleys and taps - from a ^%^%$$# CD player! on cue. We had no firing party to speak of. Heck it wasn't even a decent boombox - the sound sucked.
Pardon my rambling but I don't have time to edit - just thought I might be able to contribute.
Adam