I'm new to FS2004 and have started learning to fly.  Since I've had flight sims in the past, I understand the basics of flight.  I can get the planes off the ground and if I use GPS, I can get the plane back down and stopped without a problem.

The question is, should I continue using GPS to follow my flight plans in air or should I start learning to use IFR?  How do most people fly in the real world... do they use IFR, VOR or GPS?  What works best with the AP?  If any of my lingo is wrong, please forgive, I'm trying to learn all this and get it down.

BTW - I've got about 50 hours flight time in on my FS2k4 and most of it in the King 350 and the Embraer 170.

I also prefer other techniques instead of GPS. As I fly mostly airliners (737, 747) I use IFR. When I am tired of the big jets I fly Cessnas and then I use VOR navigation.
On the other hand GPS is not a bad thing. It is easy and good for a starter who may find difficult to follow VORs and Intersections. It may not be used that much in real life but for a simulation I think it is ok.

It all dependes on the flight levels you choose to fly and this is dictated by flight rules. I think it is the same at all countries but at least in Greece where I live this is the FL070. This means you can fly VFR below 7000ft using only your own nagivation (GPS or VOR) and you only give your position occasionally for the controller to know where you are (in case you fall down they want to know where to look for you...) and the total responsibility is on you. If you want to go above 7000ft you have to submit an IFR flight plan (departure, destination, requested flight level) and then you have to follow IFR instructions. In this case the controllers are responsible for you as long as you follow the given instructions. It is possible though to be allowed flying VFR even above 7000ft but it is usually avoided by the controllers.

Another restriction connected to the above is that your airspeed may not be grater than 250 knots below 10000ft.