Here's an update on my situation:
I took the machine back to the place I bought it from and they changed some settings which were causing it to crash constantly. Apparently the processor was labeled wrong and hence they set it up thinking it was some other processor type. I don't know if they're pulling my leg.
Anyway, I asked them to update the drivers to my graphics card and check that my RAM memory is ok. The processor is running on a 133 Mhz bus so my 133 Mhz RAM shouldn't be causing a prob. I just ran a test with FS98 at home; only a slight improvement on the fram rates, about 35-50 when airborne. On the ground the numbers are still around 25-28. It does run smoothly, but I should be getting more frames with FS98, right?
Even the AGP was set to 64 as you recommended. The only thing I haven't tried yet is installing DirectX7a. I'll do that this evening.
Also, I'm not sure if any settings in FS98 should be changed (any graphics settings or the like).
Summing it up so far: Still disappointed with the frames.
Cosmo