OKAY, I tested this in DEMO mode, using NMEA In/Out at 4800 speed. I set in the gpsout.ini file the following:
[GPSout]
Sentences=RMC,RMA,PGRMZ,GLL,VTG,GGA,GSA
Interval=1000
Port=COM1
Speed=4800
I know that the gps is talking to the computer because through EasyGPS software I can load waypoints, routes, etc.
Well anyhow, I opened up Flight Sim 2004, started flying and it didn't correspond to what I was seeing, my GPS in demo mode just slowly moves along at 20kt/hour and goes straight to the destination you choose. So the answer in short is NO I don't think FlightSimulator is sending the gps any info, and if it is the gps is not doing anything with it.
What is the "RTCM In" mode used for on the eTrex Legend GPS by the way, I haven't tried that one.