As I mentioned, I've tried numerous suggestions from here in the board to no avail so your help is much appreciated (I've detailed what I've tried below). TrackIR worked perfectly in FSX on my machine before it was upgraded so there is obviously some incompatibility with the new setup.
Here's what I've done so far:
1) Installed FSX with no SPs, rebooted, ran TrackIR setup = green light, no blue light, no connection.
(uninstalled TrackIR and deleted Natural Point directory structure between each successive step)
2) Installed FSX with SP1, rebooted, ran TrackIR setup = green light, no blue light, no connection.
3) Installed FSX with SP2, rebooted, ran TrackIR setup = green light, no blue light, no connection.
4) [same as 3] Deleted FSX folders from C:\WINDOWS\WinSxS and repaired via disk, reinstalled SP1 and SP2 = green light, no blue light, no connection.
5) [same as 3] Installed registered version of FSUIPC = green light, no blue light, no connection.
6) [same as 3] Installed SDK simconnect.msi installer = green light, no blue light, no connection.
7) Tried various combinations of booting FSX first then TrakIR and vice versa = green light, no blue light, no connection.
8) Repeatedly bashed head against keyboard = green light, no blue light, no connection, slight headache.

I'm suspecting that there's something with the system itself that is causing the problem, perhaps the drivers. The Motherboard, Video card and hard drive and RAM are all new since the last, working config prior to the system being upgraded.
System Specs:
Windows XP Pro, SP3 (Fresh install: 12/12/08)
EVGA 8800 GTX 512mb Video Card - Driver ver. 180.48 dated 11/08
EVGA 750i FTW MotherBoard - Driver ver 15.23 dated 10/08
Intel Core 2 Duo E6850 Conroe 3.0GHz Processor
WD 1TB 7200 RPM 32MB Cache SATA 3.0Gb/s hard drive
2 GB Corsair DDR2 1066 (PC2 8500) RAM
Software
FSX Deluxe + SP1 + SP2 (no Acceleration; Fresh install)
TrackIR 4:Pro - Driver Version 4.1.036 d/l'ed from website 12/14/08
No antivirus software installed
No Firewall (other than Windows Firewall which has FSX and TrackIR executables "allowed"; have tried with firewall completely off as well, same result)
No other programs running
Does anyone else who is having problems with TrackIR connecting to FSX have any of these components/drivers in common?
Thanks for your help!
Trevor