Hi,
This "effect" is also driving me crazy. I managed to get the hazy horizon (without a distinct line) to work daytime, after trying different drivers for my Geforce4 Ti4600(44.71a from ASUS works for me now) and other suggestions from Pete. But, at dusk and dawn it still looks unreal, as your screen shot shows. If I fly in central Russia, the effect looks as if I am sourounded by an ocean 50-100 miles away(All wheather types, visibility etc.). Also, at night, stars seem to appear below the "actual horizon"!
It is useless to hope for a MS patch for this, so I therefore hope one day, if possible, someone can create a program that can correct this.
Regards,
Stefan (Gothenburg,Sweden)