enfg: Thanks for the suggestion, but I can't make it run in combination with the widescreen mod (IWD2 doesn't even start) and I couldn't find a way to set the widescreen resolution within DxWnd.
The issue only occurs if I use the widescreen mod and my native resolution (1366x768). The only acceptable compromise between resolution and the fog of war not flickering seems to be to play in 1024x768 and maintain the aspect ratio...
If you're playing with the widescreen mod, you also have to select "Native Screen Resolution" under the Video tab.
Nevertheless I actually tried it with DxWnd on my own config, and the flickering was still present. I must have misremembered it, apart from the fow glitch, playing IWD2 on DxWnd was always very smooth.