Bleeeeeeech, that program looks abominable. If you want to make a decent landscape sky, try using TerraGen
I assume the real question you're asking is how to get the "halo" ring structure in the skybox. TerraGen can't quite do that, so you have two options. One, get ahold of a 3D image-rendering program like Bryce (notice how all the skypaint demo images were first created
in Bryce 2--the current version is Bryce 5--and then merely touched up
in skypaint). However, an even easier thing to do is to create whatever sort of sky you want in TerraGen or from the default game skyboxes, and then make a portal sky
that includes the giant ring.