And does this happen with the AI on and also completely off?

I suspect AI could be the problem, so I'll have to try that when I have time.

Oh, where can I download the latest DirectX driver?

The only thing that I think should be changed on mine is the "unlimited" FPS target frame rate, I think I used to have that set to lower (recommended) but might have accidentally changed it to unlimited. In fact seeing it I have just changed it to 35 and reposted the image above as I believe it frees up FSX for other things I think, plus 35 is a good rate the eye won't pick up anything faster anyway, only changes and if you set it lower than you think it can go there shouldn't be any noticeable slow ups.

Actually, I'm using an external FPS limiter with FPS set to 20.