I'm currently in the process of organizing a shoot for a horror film I'm doing with a large group of friends and classmates based off of a script that builds horror mainly through atmosphere. One of the key parts of said script is that a lot of the exterior shots take place on an extremely foggy day. Being a student, I of course don't have the money to rent off entire streets and then rent gigantic fog machines to pump the streets full of fog with, so I'm trying to tackle the problem in post production.

The project is being shot on a DV caam (Canon GL-2), and I have Adobe Premiere Pro 1.5 as well as Photoshop. I do not own After Effects, but will probably purchase it by the time editing comes around.

In order to create the fog effects, I figure I'm going to need to do (at least) two things:
1) Create the effect that the background scenery fades into the fog, while stuff closer to the camera is more visible (I'll probably need to do this with green screen overlays for foreground objects and such), as well as,
2) Have a translucent fog overlay that I can put over the picture to make it look like the characters are shrouded in fog.

Am I able to create a convincing fog effect either how I suggested or any otehr way using these Adobe products? Is it possibly without buying a copy of After Effects? Or am I just going to be stuck creating the illusion of mass fog just by carefully planning my shots, and effectively "cheating" the audience?

Thanks to anyone who may be able to help.