MS Flight simulator problem: rudder over reacting

It's been a while since I flew with MS flight simulator and I got back
in the cockpit the other day. I got CH yoke and rudder pedal and
installed FSX.
FSX is great but I have a problem (and in a way I think happened in
older versions of MSFS): when I use the rudder to maintain runway
alignment, it seems like the plane is jerking left and right a few
times until its settles back. As I am in short final I try to use the
rudder to keep myself aligned. If I apply right rudder, as soon as I
let it go the plane jerks left then right and left until the yaw
dampens.
Now, I fly the Cessna 172 (I didn't mention this was done in C-172) in
real life I the plane does not react that way. I turned P factor, gyro
and all that other fun stuff off but I still see the problem. I even
tried to lower the rudder pedals sensitivity but that did not help
either.
If anyone knows what the problem is or has any idea on a direction, I
would appreciate the help.
Thanks.