When I worked at Microsoft Aces Studios (the makers of MS Flight Simulator and Train Simulator) we had a huge GIS pipeline that drove all of the content. You would be surprised how good some content looked after you dropped decent elevation data. I was personally surprised to find out how many people sold GIS data as Flightsim extensions.
Polylines classified as roads rendered as actual traffic with a real road, urban area polygons would render as autogen-buildings, railroad polylines would be drivable railroads, lake polygons would render as water bodies, traffic signs would be points features... it was all pretty crazy cool IMHO. If you look at the Trainsim 2 video demos on youtube (a project that got canned), it is amazing to think that all the items in this scenery are driven by real-world gis data, down to the traffic signs.
And yes, editing content sometimes involved some sprinkles of ArcMap :)
If you feel like trying some of this stuff out, but you don't want to use MS Flight Sim, there is an open source project that aims to do the same thing: FlightGear. You can download Openstreetmap data and load it! Heck, even GDAL, the famous GIS data swiss army knife supports flightgear as a readonly datasource, so you can grab the scenary and export it to your PostGIS, FileGDB or whatever other vector geospatial format it supports.