That computer is too outdated to play FSX with modern add-ons at higher settings no matter how many upgrades. If that's your goal then you will not be able to achieve it with $200, so spending it would be nothing more than a waste of money.
In my opinion, you're best off saving until you can get an entirely new one. The slowest and cheapest computer that I would expect to run FSX well with addons is:
Intel Core i5-2400 Sandy Bridge 3.1GHz (3.4GHz Turbo Boost) $190
ASRock Z68 PRO3 GEN3 $112
4GB (2x2GB) DDR3-1600 CL9 $30
GTX 560 $180
Antec Three Hundred Case $60
500GB HDD 7200rpm $80
PC Power and Cooling Silencer MK III 600W $90
total: $742 + shipping not including rebates. Prices from newegg.
If you don't want to build it yourself then make sure to get that processor (or faster) as well as that videocard (or faster) and 4GB of RAM (or more).
Incidentally, this is about the same as the specifications that MS Flight runs on high settings with, according to MS.
First off, I'd like to thank you all for the information. I have never built my own computer or made any upgrades, so I am in way over my head with this stuff. I may be able to scrounge up enough money for these components, but I have no idea on how to build it. Is it relatively self-explanatory, and would I be able to do it without much trouble?
Personally, I cannot stand buying computers from Dell, ACER (and so on) because even if they have the right processor, ram, and videocard... (they often don't) which are the important parts regarding performance... they may be difficult to upgrade or fix due to non-standardized design. As an example, years ago, my father had Dell 8400 that had a defective cooler that manifested itself outside of warranty period. The cooler did not use a standardized design so to fix the problem I had to import a cooler half way across the world, at significant cost (and it took over a week), to fix the problem.
Another issue is parts like the power supply and case may be skimped on leading to lack of upgradability and a loud computer. The power supply on a different Dell 8400, my one, was loud, inefficient, and not powerful enough to run a modern graphics card so it had to also be upgraded: and since the case wasn't designed for standardized power supplies in mind, the case had to be modified with a dremel. Speaking of the case, it was a loud bit of plastic fantastic crap made for dells proprietary cooling system and motherboard mounts and to top it off it had "DELL" plastered on the front.
Eventually the first Dell 8400 died in flames after about four years of use. The second died after three years of use due to reasons unknown. I also knew someone who had a Dell 8300 that eventually would only start booting up on hot days. Turns out the power supply had to be hot to turn on, so to start the computer you needed to blow a hairdryer at the power