Stan Sted, what were the figures immediately after rebooting?
You
did reboot, didn't you?
As your VM figure is fairly stable it looks to me like it isn't really being used - which should be the case with 256MB, unless you're running something really memory-hungry.
I don't know how Norton calculates PM usage in Win 9x: and I've tried other utilities that come up with wildly differing figures. The best I've come up with is Human Ear (Mark 1). If the hard disk is thrashing, you've run out of physical memory.
My guess is that Norton is reporting the total memory used - which includes cached stuff from the disk. My next guess is that Flight Sim issues some sort of "flush to disk" command.
The following URL may be some help. In particular a lot of people set their own VM size rather than letting Windows "handle" it.
http://www.experts-exchange.com/Oper..._10045256.html