I've posted this elsewhere but thought I'd leave it here, too, in case another late adopter of either Win7 or FSX ran into this issue and thought to use the forum's search function:
I finally got around to installing Win7 with all the patches and fixes. Reinstalled FSX only to have it not start, while receiving the following error message:
Solution: Win7 installs DirectX 11.0 which should, one would think, be backward compatible. And you cannot install an older version of DirectX over a newer one. The solution was to go to the Micro$oft website and download their "DirectX End-User Runtime Web Installer". It scanned the DirectX libraries installed by Win7 (DirectX 11.0), then downloaded and installed the missing 9.0C "libraries".Flight Simulator cannot run because the version of Microsoft DirectX(R) installed on your computer is incompatible. Please reinstall DirectX9.0 by running Flight Simulator Setup, or download the current version from www.microsoft.com/directx.
Hope this helps someone in the future.