Drivers can make or break a system. I always update to the latest and usually have no problems however from time to time there is a crappy driver release. I keep a copy of the latest driver that works the best on hand to revert back to and always remove/re-install the AGP driver when upgrading the video drivers.
As for FS2004 flickers... that is sometimes caused by the Mip quality level being set too high... a display setting of 4 is usually best and eliminates most flickering with any driver release. I run a ATI x800pro AIW and I never go over 4.
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