Has anyone tried their hand at a shader that would soften up the view? Prince of Persia: The Sand of Time uses something like this to give it that storybook, wispy feel:

http://www.princeofpersiagame.com/

A comparable look, in film, would be from Sky Captain and the World of Tomorrow..it makes heavy use of it:

http://www.skycaptain.com/downloads/SkyCaptain07_1024x768.jpg

http://www.skycaptain.com/downloads/SkyCaptain03_1024x768.jpg