Herb,
I see your problem. You unzipped the CONTENTS of the gauges folder to the FSX gauges folder, which is incorrect. You should unzip the gauges folder and keep it's file structure intact, and then copy THE ENTIRE FOLDER over to the FSX gauges folder. Hope that makes sense.
Sludge,
I forgot to mention that a few posts back...Yes I prefer Jimi's HUD size. A hair smaller than that would probably still be fine.
Pyro