I'm pretty sure it's ethanol. From the production process and otehr sources. I could be wrong, as this is from a story about a year ago about the soda that was pulled from shelves in Maine that was labled ".3% alcohol by volume" because it was deemed alcoholic and thus forbidden for kids to purchase, while a comparison was made to other sodas like SPrite, ginger ale, and 7-Up which all had higher concentrations of it. They never mentioned the type of alcohol they contained, but generally when people say "alcohol" they mean ethanol.
On flavoring: it's used as a common solvent. And yes, that's ethanol, not other types of alcohol. I realyl don't think there are many other types of alcohol that are used in anything that goes in or on the human body, as they tend to be toxic. Most are highyl toxic even. At .5% alcohol, you would be hard pressed to get anything remotely similar to a buzz off of it, no matter what age/weight/tolerance you are. You'd likely vomit from the sheer amount of liquid in your system before you even got a quarter of the way there. Think of it this way: a typical beeramerican "beer" is around what, 3-5% alcohol? I may be under representing it with th 3, but we'll go with that. In order to equal the effects of one beer, you need 6 sprites. That's one low alcohol drink, for the price of 6 "no" alcohol drinks. Good luck keeping 144 ounces of liquid in your stomach to equal the effects of TWO cans of "beer"! Now, one of the higher alcohol content beers I've seen is about 18% alcohol. That's around 48 cans of sprite to equal the alcohol content of one pint of that stuff. Talk to people who do drink from time to time: 18% alcohol will maybe, just maybe get you slightly buzzed on a pint. Maybe, if you're relatively intolerant.
EDIT: Budweiser is at 5%. That's 10 cans of sprite to equal the alcohol of one can of it. I'd like to see someone try to get a buzz off of Sprite given that ratio. That's almost a gallon of Sprite to equal the effects of one CAN of Budweiser.