Fry Day, our problems with objects at medium and long distances objects are really minor compared to those at close distances.
The only problem at long distance I know of is, as reported by venom from his ground experiments, when you have huge faces with "small" details on them(causing the small details to disappear).
At closer distances you can notice it more, even if zbuffer works better, and you notice it expecially whenever there are groups of faces one behind the other at close distance, usually in convex shapes (intakes and other similar situations). This is a big problem for modeller: you can easily avoid or reduce those problematic areas in very low poly ships, but if you want to increase the detail, and the beauty of your artwork, well this is a very big limit.
Personally I don't see too whay we should spend time creating new models for an engine, if this engine doesn't let us build models nearly comparable to actual standards.
And althought my knowledge is limited, considering the 3d games released about in the same period, well I think that fs2 is the one with more clipping/zbuffer problems I saw, so excuse me but I don't think that it is only a problem of 16bit/24bit zbuffer