I am searching for a good way to do a space atmosphere... or suggestions for improving what I am currently doing..

SkySphere... Works well, but you can see the edges of the polygons in some places and the texture warps a bit in some places.

Sky sprite entity.. I set it to Dome... but you loose the horizontal.

Any other alternatives, or suggestions for improving the way these things look?

I'm experimenting with this as well. Take a look at Joshua's Particle System Simulator. Here's the thread:

PSS Thread

and here's the link:

PSS.ZIP

Use the -d usa command line to see it in English. The author is Brazilian, so the default language is Porugese.

Mark