graphics problem

Without knowing anything about your computer system I would guess that you need to clean out your old video drivers and Install the newest ones from the manufacturers site.
Let us know how you do.

How much ram do you have.

I have a RAGE PRO 128 Ultra. 32 mb

RAGE PRO 128 Ultra. 32 mb
Isn't that only a 32mb card. That isn't sufficient to run the graphics properly for the sim. Get the latest drivers from the manufacturers site, turn down the scenery slide (to the left), shut off shadows, use as few clouds as you are comfortable with all to save the power of this card for everything else.
If your computer is a few years old you may not have enough memory and a powerful enough CPU to run the sim full out.
You'll have to sacrifice looks for smooth flying.
Shut down any background programs as you can and reboot before you want to fly.
See how all this works.
Good luck.

I am using a 128 pro, 2.4 Athlon 512mb memory, and I am having the exact same problem. I have used the very latest updated driver and trying a meriad of graphics setting in fs and the ati panel. nothing has worked ! This is very frustrating.

It's all in the drivers, I have the same card as you. Clean out your old ones, follow the directions that ATI gives you on how to clean out and install new drivers.
I'm using 4.8.
Try running it at a lower resolution, say 800x600x16 and see how it does.
If it's all right then slowly move up the resolution.
I have AA at 4 and AF at 16. I run mine at 1600x1200x32.
Did you run dxdiag (in run) to see if the drivers were ok?

let us know how you do.