It's possible your FSX registry path is incorrect so the installer can't find FSX.
Download the Flight1.com FS Registry Repair tool which should fix the problem.-http://www.flight1.com/view.asp?page=library
Once the installer finds FSX, you'll see 2 'path' lines. The 1st is 'FSX path:' and should be the path to the main FSX folder.
The 2nd is 'FSX subfolder:'. This is where you want the ai aircraft installed. Though you can install them in ...\SimObjects\Airplanes\ I would suggest you install them in a seperate folder. To do so:
-In your FSX main folder, create a new folder named AI Aircraft.
-Open the FSX.cfg file, find the [Main] section. Add the following line below the existing 'SimObjectPaths' lines.
The installer automatically installs the 'Traffic_*.blg' files in the existing ..\Scenery\World\scenery\ folder.
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