I take it, you have an Nvidia vedio card with Vista.
There's a clitch but I figured out a work around.
To get the flashing to stop simple turn off the texture...lol that's no good.

Here's something better.

Uninstall 2.7 before you load 2.8.

Drag the model folder out of 2.7 fms programfiles/fms/model.
This way you can still use those models.

Load 2.8 version of FMS. You can get it from the FMS site.
This will allow you to use photolistic scneries. 2.7 won't

You must convert the 6 images (skybox) into .BMP files.
Use any art software. Such as GIMP , Artweaver, windows paint ot Batch converter.

The simple works around is just using incorrrect image size for the bottom panel.. ( image #5 in my files)
For some reason nvidia is trying project this image backwards....therefore cuasing the flashing.
I basically turned it off by using the wrong size image. It bascailly won't get display.
You don't see it most of the time anyway.

If you resize all the terrain images in 3d landscape...the flashing will disappear too...but that's no good.lol

The files I'm linking has it already...All you need to do is change the images from .jpg to .bmp.
http://www.mediafire.com/download.php?udjzz3dtjjn

TURN OFF THE FOG.
TRUN OFF THE FIXED CAMERA
TRUN OFF THE MIPMAPPING
TRUN OFF THE TRUE ALPHA.
ZOOM OUT to proper veiw from the defualt setting

These are the features you must turn off when not using 3D landscaping.

Just drag the folder out of the ZIP.
Then just change the file path when you select load scenery in FMS.
You don't need to import these folders into FMS.

If you go to the FMs site and do a little reseach. i posted plenty of threads of how to create photlistic scneries for FMS.

You can also try this new sim...I can't figure out how to turn off the autozoom...therefore it feels extreemly awkward for me.
You can also use this sim to convert EQUIRECTANGULAR. You can retrieve third party's sceneries of Reflex from rc-sim
http://www.leobueno.net/

Heli-x is also a freeware.
There's links to sceneries download from heli-x.net.
Harald has hunreds.
Harald also made sceneries for FMS. The files are in .jpg.....becuase .bmp are denser. It's 90mb @2048 per scenery.
Do the samething....Resize the bottom panel to 2050x2050

You can also resize the images to 1024x1024 if you don't have enough room.

There's also CRRCsim

These are all freeware.

Good luck and welcome to the world of R/C.