In FSX "windowed" mode, I have the same problem, everything looks "pixelated/boxy" and I can't read any of the text on the overhead or throttle panels when in VC mode. My night time VC looks pretty good to me, at least I can read the text on the overhead and throttle panels in VC mode and it seems to have more detail, unlike during the day in VC mode. Also, the 2D panels look really nice and as they should look, day or night. Its just VC/day that I'm having the problem with.
Here are two pics of the overhead panel, one in VC and the other 2D. The 2D is nice, smooth, detailed and you can make out the text for the different switches and buttons. The VC, on the other hand, you cannot read the text and the quality seems very low.
2D...
https://picasaweb.google.com/lh/photo/XtwRhWHF17bkJHEQ-X7nP5R9v-FuYsGZdycB0ktWfCE?feat=directlink
VC...
https://picasaweb.google.com/lh/photo/Wv8N2ee8kuw_C0mlI2u5RZR9v-FuYsGZdycB0ktWfCE?feat=directlink
My Windows res are...
1366x768 (What I have it set to now), 1360x768, 1280x768, 1280x720, 1280x600, 1024x768, 800x600.
My FSX res are...
1024x768x32, 1280x720x32, 1280x768x32, 1360x768x32, 1366x768x32 (What mine is set to now), 1024x768x16, 1280x720x16, 1280x768x16, 1360x768x16, 1366x768x16
I tried contacting the developer who emailed me back telling me to get on this forum.