To show what I mean, here's a pic: http://i732.photobucket.com/albums/ww324/Thezezeal/ScreenShot2-1.jpg?t=1305580144

I want the whole of the Sky to be like the top bit-- the fancy light show; is there a way to remove that dark discoloured bit from below the horizon? I've messed a little with the Weather settings, but not seen any difference.

That looks like distant land fog effects to me. Are you rendering the maximum distance, or do you have a slower computer and need to limit distant lands?

For example, I can see clear accross the whole of Cyrodiil with my settings, from on top Dive Rock.

Decent PC. This is a Custom Interior, with Behave as Exterior Set. In Tamriel, visual disance is fine, so if it is caused by that, it's going to be one of my settings for the Cell/Weather, but I've no idea which...although, if it is fog, then that narrows it down

I'm just speculating here but I believe the sky textures are only mapped to the top half of the skybox. The bottom half 'below the horizon' uses the fog color. I don't think there's any way to change this but I could be wrong. You can change the color of this area by changing the fog color in the weather editor but I think you would have to have access to the engine code to change how fog works and edit the skybox mesh to apply a texture to the bottom half of the skybox. Unless the sky texture is being mapped to the whole skybox and the fog is just blocking it by having 100% opacity at the horizon but that seems unlikely.

Edit: actually, there probably is no bottom half to the skybox. It's probably just a colored plane.

Ah, Interior.

What you could do it add a water layer to at least an altitude of 0. But I think 2000 is recomended. (or was that 12000?) And include 'distant lod' to it. Now you block what is 'below' the horizon.