From a newsgroup post: "This is the error that happens when My Documents is moved from the default location in Windows XP. If you have XP and have done this, then move it back to it's default location (no need to move the files) and run FS2004 again. If you're running an OS previous to XP, simply search for fs9.cfg (it's in a hidden system folder) and delete it. Restart FS2004 and you should be OK".
This error can be caused by a conflict between Flight Simulator 2004 and Internet Explorer 7 BETA 1. Flight Simulator crashes when it is trying to display HTML content of the in-game menu. Problem solved by uninstalling IE 7 BETA 1 by the standart way (add/remove programs). System switched back to previous version of IE and Flight Simulator is running OK again.