Help Optimizing Flight Simulator X

Hello everyone! I was hoping that some of you might help me solve a few performance problems that I have been having with Flight Simulator X Deluxe Edition which I bought when it was first released in Oct. 2006. I was largely unable to play FSX until SP1 came out due to performance issues. Anyways, I've never been able to really get over the performance problems and get FSX looking as good as FS2004 (stock).
My computer system is not that powerful and it is a laptop but it should be able to run FSX on settings that make it look at least as good as FS2004.
CPU: Intel Core Duo T2400 1.83ghz
RAM: 2GB DDR2 @ 667mhz Dual Channel (1.5+GB free after boot)
GPU: Mobility ATI X1600 256mb dedicated w/ Catalyst 8.5
OS: Windows XP Home SP3 (Just reinstalled)
I have Win XP reasonably optimized with minimal services running and various other performance optimization tweaks.
Anyways the problems that I am experiencing with FSX are as follows:
-The dreaded blurries (I've read the article and applied the tweaks with no change). This really annoys me because ground textures at 0.25+ miles it look a lot worse than FS2004.
-Erratic performance, basically I am looking at one spot and I am getting 30fps for a few seconds and without me doing anything it will drop to 25 then to 20 then to 15 and fluctuate wildly for some time, it's really annoying and upsets the flow of game play.
What I really just want to do is make FSX look at least as good as FS2004, but the blurries really prevent me from doing that. The erratic performance is a bit annoying but not as annoying as the bad looks.
Here are screen shots of my graphics settings: (ALL traffic is off).




Thanks for looking!
My computer system is not that powerful and it is a laptop but it should be able to run FSX on settings that make it look at least as good as FS2004.
CPU: Intel Core Duo T2400 1.83ghz
RAM: 2GB DDR2 @ 667mhz Dual Channel (1.5+GB free after boot)
GPU: Mobility ATI X1600 256mb dedicated w/ Catalyst 8.5
OS: Windows XP Home SP3 (Just reinstalled)
I have Win XP reasonably optimized with minimal services running and various other performance optimization tweaks.
Anyways the problems that I am experiencing with FSX are as follows:
-The dreaded blurries (I've read the article and applied the tweaks with no change). This really annoys me because ground textures at 0.25+ miles it look a lot worse than FS2004.
-Erratic performance, basically I am looking at one spot and I am getting 30fps for a few seconds and without me doing anything it will drop to 25 then to 20 then to 15 and fluctuate wildly for some time, it's really annoying and upsets the flow of game play.
What I really just want to do is make FSX look at least as good as FS2004, but the blurries really prevent me from doing that. The erratic performance is a bit annoying but not as annoying as the bad looks.
Here are screen shots of my graphics settings: (ALL traffic is off).




Thanks for looking!