This appears to be a very common problem with later versions of Windows XP, which may not have any serial ports for FMS to use.
I will explain how I overcame this problem and soon got FMS working fine on my Windows XP PC.
You probably need to create a "virtual serial port" on your PC.
Fortunately, this can be done simply and automatically by installing VSPE (Virtual Serial Port Emulator) from eterlogic.com
So, first go here:
http://www.eterlogic.com/Products.VSPE.htmlAt the very bottom of that page, click the link to Download VSPE.
Follow the process to install VSPE on your PC.
When it has finished, you should have a VSPE icon on your desktop.
Next, you are going to use VSPE to create a Virtual Serial Port.
Launch VSPE by clicking the icon.
From the Device menu, select Create, then click Next to create a new connector.
Click Finish to create a virtual com port (it will probably be COM1).
Come out of VSPE.
Now try again to launch FMS - and it should work!
Don't be put off by all these instructions. The process is much easier than it sounds!
If you reboot, you will need to follow the process again from "Launch VSPE" above, but in only takes a few seconds.
Good luck!
And PLEASE post here to let others know if that worked for you.