If you try and install the version from the avsim library and it cannot find your FSX installation it will stop and ask you to set an environment variable FSXDIR to help it find it.
There are some brief instructions in the readme.txt But here is a proper guide. Note that the next version of the installer will look a lot harder – its currently assumes its under \program files on one of the drives. from the help requests it seesm that is true for about 99% of people.
1. Windows Start
2. Right click computer on the right hand side (its highlighted in picture) and select properties at the bottom To get this
3 ) Select Advanced System settings from left hand side to get this window
4) Select environment variables at the bottom
5) Select “New” in top window
Enter FSXDIR as the variable name and the path of your installation – the directory containing fsx.exe as the value.