On the fifth day of creation, to hide the z-fighting and to prevent distance objects from suddenly popping into view, God added curvature to the earth.
Atmospheric fog and curvature together would probably help set an absolute limit to your terrain. Any ridiculously high objects - like mega towers or mega mountains, you could add just those (hopefully few) extreme situations to your skybox.
Yeah, on earth, the horizon is about 5km away, or 36km if you're on top of a 100m tower. 5km is definately feasible for most games. 36km is feasible if you've got great world LOD'ing :D
You can also just stop rendering things past a certain distance as an extreme/simple form of LOD. In my game, the world only exists out to about 5km, and suddenly stops. The atmospheric scattering effect draws a curved horizon in the distance, with fog thick enough that you can't actually see where the ground ends and the edge of the world begins -- it just looks like a smooth horizon!
If you use the debug camera to fly 200km straight up into the air, the horizon gets more and more curved until you're in space looking down at a pale blue dot like a space simulator :D Even though it's just fog (you can't see any continents or oceans), it's a pretty amazing effect to make it feel like the game world is boundless.
