If you are able to magnify the characters while in the regular dictionary, you should be able to magnify them on the flashcards.
I'm able to do it on my Treo 600 without any problems.
Select the menu, Dict, Preferences, Characters, and make sure that "Enable char magnification (tap)" is selected. If not, you should select it.
While in the flashcard, just click on the Chinese character and it should automatically magnify assuming that you have the proper magnification font.