I use "On Top" flight simulator (ASA). I expect that this is less demanding of computing power than FS2002 as the graphics are somewhat simpler. When I first started using the software it was on a machine which exceeded the minimum system spec' by quite a reasonable margin however I found that the frame refresh rate was so slow (2 - 3 / second) that it made accurate flying very difficult and tedious. Sometime later I upgraded the PC (actually more of a replacement) - 1GHz Athlon, few hundred Mb RAM, better graphics card etc. The improvement I found when using the simulator was quite incredible. (frame rate about 8 / second)
I should think the same is probably even more relevant to FS2002. Of course for using the software as a procedural tool then the graphics settings can be set to require minimum system resources.
It would be useful (if you can) list the system spec' of the present system. A PIII 500MHz is not a bad system so I suspect that there is a bottle neck somewhere (poor graphics card for eg) or that the system settings are set at too demanding a level.
Fujiflyer