I would suggest that you consult an OT. They may be able to help him with a replacement behavior, but he needs some kind of stimulation at that point, or he would not be doing it, so you are likely to not like the replacement either, so it is likely that you have underestimated how many needs he has, and you need to expolore the sensory aspect of autism. Do you have a full evaluation from a Developmental Pediatrican? Cognative behavioral therapy, Play therapy, social skills groups (I assume this is what he is getting) educational interventions, occupational therapy, psychiatric care and medical management are all important aspects of Autism care. Most high functioning kids do not need Applied Behavioral Anaylis, but they could get it I suppose. An IEP for school is probably in order, at the very least for behavior and speech therapy, and I would bet OT.
There is very little you can do to keep him from being rideculed if he is school aged. Even if you get passed the flapping, there will be novel glitches that will make him vulnerable to saying or doing something that will draw negative attention, and you just can't predict it or prevent it. I won't sugar coat it for you, kids with ASD get made fun of.
One thing I think you are doing right is telling him when he does something that makes him look odd. Kids with ASD don't know what looks odd, so they do need to learn it some how. Teachers are very afraid to tell kids at school when they do things that draw negative attention and bullying, but they really should be explaining how their own behavior affects how they experience life (in a nice, private way, of course.) I would enlist his teachers, the school counselor, and the school speech therapist to help you with this task, and ask them to pull him aside and explain how what he is doing looks to others and make this part of the IEP (I would say odd instead of weird.)
Another suggestion to you is that you ask the school for a behavior plan that includes how to handle the flapping in a positive way so that if he were to accidentally hurt another child at school, you have a set way to handle it that will keep him out of the principals office for a zero tollerance behavior. Hitting another child while hand flapping would be a manifestation of his disablity, but you don't ever want to be in the position of arguing this after an incident, be proactive and request the service prior to any incident ever happening, and get the assistance of your school in dealing with the behavior with positive interventions and supports.
This is assuming that your son is young and in elementary school. If he is still in preschool or younger, then you should be accessing more therapies that will help him with these behaviors, and if you don't have that full evaluation, get it ASAP!
M.