Does anyone know if I can use both Raevwd and mistdefy oblivion, or if their roles will basically overlap?

http://www.nexusmods.com/oblivion/mods/44827/?

You can definitely use both as they perform totally different functions. RAEVWD adds lod meshes for structures that don't have them in the vanilla game (eg. forts, ayleid ruins, ships), and the Mistdefy mod seems to just increase the distance of (remove?) the fog from the game.

Worth bearing in mind though that All Natural allows you to change distance fog through its .ini file, and will give you more control because you can set it to a multiple of the vanilla distance: so you could set it to 10 to achieve an effect similar to Mistdefy where you can see the edge of the landscape meshes, or you could set it to 0.5 to make the fog much closer. Your choice!