The code you posted looks like the UPS shipping server behavior, it should be on the confirm page. If you are unsure you can try selecting it from the server behaviors tab of the application panel. When you select the server behavior the corresponding code on the page should become selected.
Then you just add in the if statement around the entire thing. The point of this is to prevent shipping quote from failing and returning you to the shipping failure page.
If you continue to have trouble with it let me know and I can open a ticket for you on the back end to help determine what is going on.
Also, you may need to update the cart display that you have on the confirm page to reflect your new shipping rules. As a test you can create a new page and add in a cart display to the page. When you are testing your checkout and get to the confirm page you can just visit your test page to confirm that you get the same results on that page.
One other thing is the set session code you have on the confirm page, you need to make sure it is like this:
if(($_POST["UPS_Service"] != "") && (($_POST["UPS_Service"] == '50') || ($_POST["UPS_Service"] == '100')) ) { // I used 50 for US and 100 for internationsl
$_SESSION["flat_shipping"] = $_POST["UPS_Service"];
This will ensure that the flat shipping server behavior will only be set if there is a posted value and it is either 50 or 100.