adwb:
With my ATI 9250 which is roughly in the same ball park as your GFX, I was able to use the menus and they looked perfect too.

It's possible that some manually set accelerator settings (set outside of FSOne) can ruin the way the menus look. Just an example: I manually put my antialiasing setting to max, which improves the airplane graphics, but distorts some small details in the menus (only a slight distortion though).

So if you go ahead with it, and have some menu issues, check your manually set accelerator settings (outside FSOne)... might be something in there doing it. I don't see why the GFX would not be capable of displaying the menus.

edit: But as sctholson said, if your comp is not clearly within the specs, then you can't know for sure. Like I added to my earlier post, your GFX could be slightly less than an ATI 9200 (which is minimum). Generally laptops are not the greatest for gaming type applications, if for no other reason, they do not dissipate heat nearly as well as desktops (overheating can lead to instability and hence symptoms like system lockups).