Before starting, you must ensure that FS Sound Studio knows where your copy of Flight Simulator is located. This is because the location of all Aircraft and Sounds are relative to this installation directory. FS Sound Studio will also ensure that you only use Sound files that are available when Flight Simulator is run, so you can not create a configuration which will not load properly.
The first time you ran the program after installation, you were presented with a dialog to enter this data. You can also call this up at any time with the Options: FS Install Dir and Mode... menu pick:
On our example system, we've installed FS2002 in C:\FS2002. This is the root directory of the Flight Simulator 2002 install, where the fs2002.exe file resides. (The default directory is C:\Program Files\Microsoft Games\Flight Simulator 2002.)
If the current value is not correct, select the FS2002 check box and enter the proper directory either by simply typing it in, or click the Browse.. button to bring up a file browser. Click OK when the entry is correct.