http://www.youtube.com/v/P-Nw4CANeBc
So, here is the system (still not finished) with the skysphere and my infantile physics system. Again footage taken on my poop laptop so bit slow, but on my 360 it's a steady 60FPS.
I think the flying ship gives a better perspective than the terrain, also I have altered the cloud shader to take into account the time of day, you will see at night fall the clouds are no longer bright white.
As ever comment and ratings welcome.