Here is what I’ve done so far:
It’s flat. How can I mimic that fog and sky seen above?
It is called fog or mist and most 3D packages support it.
Here are a couple of links, but I’m sure you could use the site Search engine to find more examples.
http://www.blenderartists.org/forum/showthread.php?286957-Simple-Fog-Mist-in-Cycles&highlight=mist