Fog makes sense. It looks like the sort of thing you get when two meshes are drawn in the same place in 3d space and I think fog mods tend to use semi-transparent mask objects. There are much cleaner and more efficient ways of doing fog, but probably much harder to insert into the ancient game code. Increasing the precision ("quality" on your graphics card settings) should fix it as it obviously worked for someone.
i noticed some of the ship models in GWX Knights Cross flickered a bit, which might be the same thing, it's easy to accidentally duplicate some polygons... But could be something else...
