I had the same problem until I read many forums for Helicopters online. The answer was not in one place. But here is how I solved my problem. After installing PPJOY and selecting Virtual joystick 1 and Com 1, I got "error 5 opening com port". This error message appears to the right of the Serial port box in the PPJOY window. If all is working ok the message should read "Reading serial stream". If you get the error 5 message then the com port is being used be another program. You can verify this by starting Hyper Term and select com 1. You should get a message saying that com 1 is in use. Microsoft Active Sync had a process running that takes the com port even though my pocket PC uses a USB port. I disabled this process and PPJOY started reading the COLCO controller. Under Serial protocol in the PPJOY window, I had to select FMS PIC 19200 baud to get it to work with the FMS simulator. If you check the box "Beep on serial input, and your COLCO controller is connected, you will hear a stream of clicks from your PC internal speaker NOT YOUR SOUND CARD speakers. NOTE!!! You get a BONUS. With the COLCO controller and the above configuration you don't need the AC adapter or batteries in the controller for it to work.:;): Remember PPJOY must be running before starting FMS.
After starting FMS, I went to the control drop down menu at the top right on the screen and selected analog control. Under interfaces, I selected Joystick interface and NOT the serial pic interface as one would expect. When I clicked on the resources button at the lower left, six bars showed on the next window. Move a stick on your controller and you move a bar. I then click on the Mapping/Calibrate button. For mapping I used Tail-4, Nick-2, Roll-3 and Pitch-1. This setting is for Helicopters. The top four channels are for airplanes. Next, I clicked on calibrate and followed the on screen direction. Selected a helicopter from the main FMS screen under Model/Load and I started crashing all over the world. These sitting may or may not work for you. So experiment. You can't hurt anything.
I hope the above save you a lot of you time from setting up anf getting FMS to work.
PS: My system is a DELL 8400 running Windows XP Pro with service pk 2