I started flying in the late 1960's and so, like many others, I've been fascinated with the development of flight simulation - right back to the crude graphics of the ZX81. After that it was FS4 and then every update on this program right up to FS2004. Others tried include Fly, Flight Unlimited, X Plane, MicroFlight and many more forgotten in the mists of time. I have also used my real world skills to built aircraft and scenery for FS but that's another story.
Does FS help with flying training? It does - but I say that guardedly because it depends on so many variables. on one side the quality of the PC system, the software and the hardware all make a big difference to the FS experience. On the other side it depends on what you are trying to learn from using the PC as an aide to your flying.
I introduced FS to the local flying club in the mid 1980's to use as an instructional tool. It was good for showing certain things that blackboard scribblings failed miserably at - like the relationship between AoA and speed or radio navigation - but it was useless for any serious FLYING work. Two main reasons were the poor graphics at the time and that keyboard flying was an alien environment to pupils. A stick added to the PC helped a bit.
One thing sticks strongly in my mind. Real pilots were awful when you put them down in front of the PC to fly the simulator. Robbed of all sensory input the immediate effect was that everyone (myself included) would severely overcontrol the aircraft. Lack of peripheral vision also became very frustrating. The opposite was the case with PC flyers. We got a few of these given trial lessons for birthdays/Christmas and they mostly proved very capable at handling the flying controls - but they ignored other aircraft systems and stayed glued to the instruments
FS today is much improved and you have lots of additional software and hardware to make it better. In the UK we probably have the best situation in the world because of the high number of first class designers making good airports and scenery. OTOH these tend to highlight the shortcomings of the program even more. An example is the very detailed airports in the UK2000 collection which are highly realistic in visual modelling but are not quite believable because of the fact that all FS airports are table top flat (they've not yet created runways with a gradient).
Aircraft in FS can be frustrating to use as a means of learning the real aircraft. Most just have basic panel displays and approximate handling characterics so don't trust them too much. Some designs go better in reproducing aircraft systems but these can only go so far if you are trying to cram them all on one monitor. The Dreamfleet Archer is a good system aircraft as you can access most aircraft controls with very few mouse clicks. Go up to FSD's Navajo and although they have reproduced all the real Navajo systems these have to be brought up as "pop up" panels with the result that it takes twice as long to run through the checklist than it does on the real aircraft!
I could write a lot more but I'll shut up pending feedback/bemusement.
For what it's worth I use FS2004 on a high end system with a 21" TFT monitor. I use a CH stick because I prefer sticks to yokes in real life (fly a LongEze and you'll be converted for life) and CH pedals. I have a bunch of GoFlight units for radios, electrics, autopilot, gear and flaps and I also have their throttle unit which is excellent for accurate throttle,prop and mixture control. For UK flying I use the UK2000 scenery and the VisualFlight photoscenery and high resolution mesh - and this tranforms the UK into a very believable landscape. I also plug my Garmin GPS III Pilot into the PC so that it follows the path of the FS aircraft - a neat touch that.
FS is getting very good these days but it is still worth using with caution if you are thinking of it as an aid to real flying training. Use it - but be aware of its limits.
As a final comment look at the Chipmunk screenshot at
www.fsaviation.net and tell me if it could be mistaken for an actual air to air photo..