I beg to differ, after doing more testing today, the culprit is the object shadows. I suspect that when cfs was originally released, using the cpu for generating the shadows was ok for the relatively small number of objects back then. With OFF the number of objects requiring shadows has been greatly increased. This explains why my fps fluctuated so much - it depended on how many objects were in view at the time. Now that I've determined that it was the shadows causing the problem, I have been able to bump the particles back to 'effects-5' levels. In fact I can set the object density in OFF manager to high with minimal impact on frame rate.
Regarding clouds I will happily trade blocky aircraft shadows and no object shadows for a sky full of clouds and an AI that cannot see me - this is a flight sim after all, the sky is where the action is!
Anyway now that I have everything running nicely, I'm off to try the campaign - wish me luck!