As far as I know, the xbox version uses a farther normal draw distance for the terrain (which also affects the distance at which certain objects are shown in full detail.

Most people playing FFXI on PC have decent enough CPUs to allow for a higher draw distance.

However, as an additional note, it would be ideal if this can be done without altering the fog distance, as it would ruin the effect of foggy weather.

Note: this isn't about sight distance, which can't be altered on one platform and not another without creating imbalance- and the PS2 probably cant deal with a wider sight radius.