What got me to wondering is: why delete folders containing Terrain, etc. info?
I did this fix a while back on my XP box and (it works fine) there is only a Shaders folder in there containing the same 5 subfolders mentioned above for the Shaders folder but no Shaders10 folder (for DX10 I'm guessing - I'm fairly certain I deleted both the Shaders & Shaders10 folders completely on the XP box when I did the "fix" and lost the Shaders10 folder as mentioned above). But, as that box has a DX9 GPU the fact that I lost the Shaders10 folder should be no biggie, if indeed the 10 refers to DX 10. My XP box with FSX Accel runs fine ( but not as smoothly at the high graphic settings I prefer) with no flashing cloud textures. My Vista box will occasionally exhibit a minute or two of a specific cloud or two flashing at the start of a flight. Ocassionally the whole sky and clouds ( as well as water) will sometimes "burp" for lack of a better word, I always chalked that up to Nvidia cards. Also, I am presently using FEX on the Vista box, XGraphics on the XP box.