I now there's a patch to remove the black fog-of-war, but is there anything out there to remove the clear / transparent / pixelated fog-of-war?

The game would look a lot better without some pixelated layer covering everything but the small area my party members are.

IIRC this wasn't done because no one has figured out how to interact with things outside a certain radius, so removing the visual clue for that radius would be obnoxious

If your fog of war appears extremely jagged then that can be fix by my patch:
http://www.shsforums.net/topic/48732-ddraw-fix-for-slowdownsstuttering/

Your patch is amazing. It fix that annoying pause/unpause when using the character's wheel and it also makes the game run a lot smoother.

Unfortunatelly I don't see any difference regarding the FOW. It's very annoying seeing it flicker every time I move the camera around. I wish there was an option to disable it, even if you loose the visual cue for interactive area.