Skies are one of the most important yet easily neglected graphics in a game. In a typical 3D world the sky can occupy as much as a third of the screen, so having a good one can do wonders for overall visual quality.
The great thing about skies is that you don't need fancy shading techniques or leet artistic skillz to create them:
Voila! You just created a detailed, realistic, and unique sky for your game.
The only problem with this technique is that you get discontinuities at the top and bottom, where the texture is pinched into a single point at the poles. I think people worry too much about this, though. Most games have some kind of ground, so you will never see the sky when looking down, and as for the top, how often do you look straight up? That is impossible in many games, and rare in almost all.
If your camera can look straight up, use a gradient fill to fade your sky texture to a constant flat shade at the top. For instance this:
would become:
Sure, the very top looks a little boring compared to lower down, but this is plenty good enough for the handful of times when the player actually looks that way.
Simple, efficient, doesn't require great art skills, and the quality of the results is limited only by how much patience you have waiting for the weather to cooperate...
This is how we created all the skies for MotoGP. Although we included tracks from all over the world, the sky photos were taken from the roof of our office building in Brighton. For several years, the artists kept a constant eye on the weather. Every few days I would hear someone cry "wow, pretty clouds! Quick, where's the camera?"