If you havew a VIA chipset make shure to get the latest 4in1 drivers. Aslo good to run BIOS at latest version.
DirectX version should be at least dx9.0a.
The 8something version that comes with the CD is buggy.

As a first aid let Windows search for all files with extension "bdp" and "zx" inside your CFS3 folder and delete them.
They'll get recreated next time you run the game.
Next go to "c:\\documents and settings\your user name\application data\microsoft\combat flight simulator 3.0" and delete the entire folder.
Do the same with c:\\documents and settings\your user name\my files\combat flight simulator 3.0" if there already is such a folder.
Last run the cfs3config tool from the start menu and let it try to reconfigure drivers.
now start CFS3 and see if it's any better. Oh, and fingers crossed.

BTW, I have the same graphics card, no luck with the newest drivers either although it shows just in corrupted visuals.
I'm stuck with the 56.72 drivers.

Ok, i tried again, and this time it came up with a box saying "configuration override file corrupt or missin, please re-run CFS3" So then i ran it again and it did the same thing. Then i ran CFS config, and it started giveing me the same problems it was giveing me before. So i must be a problem associated with that file.

Ok, i deleted the Folder in My Documents and the one in application data, and this is what it did:

When i run the cfs3config, it goes back to ooing what it was doing before.
Note: I am running it in 98 compat mode because if i don't, it just keeps doing what it was dooing beforel, with no change. It also keeps doing the same thing if i try to run it in compat mode for NT4 and 2000. It shows the above screen when in compat mode for ME/98 and 95.

Oh, forgot about an important thing, have you dissabled firewall and virus scanners before installing?