Yeah it does work doesn't it. Tine of Fury a new Grand Strategy game came with loads of graphic options and I saw a screenshot i really liked which had a similar effect. I don't own the game as it's not my scale but I loved the look of the map.
I see you use the blank counters....I think RV is missing a polish blank counter...I must go back and make those blank counters a bit better as I just threw in Iron X's as they fit but he didn't make any for Poland I believe.
The latest AotR download has the blank counter option included as it was missing. Though it makes the counters smaller rather than putting a highlight around them, I prefer a highlight..so I will redo them.
Below is a link to the latest AotR mod with blank counter option.
http://www.4shared.com/zip/J-pKvBiL/AotR.html