(maybe its just me, but the swf is not working) I think i get what you are trying to do. I had use a similar solution for the games we recently developed for Doritos iD3: Too many triangles in the scene, so we used a z depth filter. At a given distance from the camera, triangles are not rendered and to fade the triangles out of view from this we used depthbitmapmaterials. These take care of fading the materials out towards the edge where there are no triangles and merge the color to the empty background color. This can simulate darkness, fog, etc.
If you want a code sample I could set up a simple demo in my blog. Let me know! Li
