Hi Waldo,
If it says "Keyboard" and "Joystick" in the "Controls" menu then it's not FMS 2.0b7 ... it will probably be the prior version, 2.0b6. (See shot below)
The older serial and parallel interfaces don't work under Windows 2000 or XP, so the "Radio transmitter" menu option is hidden on those operating systems.
If you have 2.0b7, though, under the "Controls" menu you should see an "Analog control..." menu option. (See shot below)
You need to go in there to select your transmitter interface. Once again, the older serial and parallel interfaces don't work under Windows 2000 or XP - you will have to build and use the Serial PIC-interface (which has some brains in it to deal with Windows' lack of).
Hope this helps.
Kind regards,
Anthony.