Well, there are one of two things that may be your problem. If you have set anything on your radeon which is different from the default settings, change it back, or download and install new drivers. ::)
second, FSX might not be compatible with your video card.

My problem is that my graphics card doesn't support certain aspects of the DDS textures, so in some VCs i can't see out the window...

FS Water Configurator+ has new modifications in the works, plus DirectX 10, Service Pack
1, and Radeon HD 3+ Series support.