What has been the impact of the visual horizon line (where the earth
appears to meet the sky) on the development of art, psychology,
conciousness? Are there any studies, theories, commentary on this
question?

Dao --

I can't answer your question completely, but Colin Turnbull, in his
well-known study of a Pygmy tribe, describes what happens to these
people (who typically live in a walled-in forest world) when they
experience life on the savannah:
http://www.amazon.com/exec/obidos/tg/detail/-/0671640992/103-5148680-6060644?v=glance

Turnbull tells the story of one of his guides who believes that the
savannah elephants are much smaller.  The Pygmy doesn't realize
perspective and distance -- and so believes that an elephant seen a
mile away should still be the same size as one 50 yards away.

Best regards,

Omnivorous-GA