And we aren't saying that the water effects should be perfect, just that this is the sort of effect that FFXI would use.
Despite being just an animated texture and a simple particle effect, FFXI's "splash" as you run through water is more convincing than FFXIV's
SE didn't change their sky technology from ffxi
Sky boxes sky domes/spheres and sky planes are all pretty basic stuff that every 3D game ever made uses in mostly similar ways. There's not much room for innovation here just refinement.
I guess you could make voxel clouds animated a particle system but that would have a huge performance cost and not really be worth it on today's graphics cards (maybe in a few years though)
EDIT: In a very cartoony looking game you could use metaspheres and a particle system to generate cloud geometry and then use a shader to give it a cloud-like appearance. It wouldn't look realistic but it would animate well and not have a large performance cost. Edited, Sep 16th 2010 3:31am by Lobivopis