Ed,
Route flap dampenning should only be applied to EBGP learned routes or
EBGP announcements. It can be applied to inbound, outbound, or both,
but as defined is applied to inbound only. It should never be applied
to IBGP or you will get routing loops. It can only be applied to a
link adjacency by the router at the link so you keep a consistent IGP,
otherwise you get routing loops.
Please see:
http://engr.ans.net/route-dampen
If you have any corrections to the usage, please let me know. One of
these days I'll fix this thing up and submit it as a draft again.
Curtis