I have had no problem with the altitude pegs either, and we've had some games where close to 10 pegs were used as well! Usually not quite that many though, more like 7 to 8, I'm gonna say, in most cases.
The reason we've used so many altitude pegs is because we've had games where the fights have slowly worked their way down. If you just set an artificial altitude "floor", then it can sometimes force the game in ways that it wouldn't otherwise, if you just make allowances for the additional altitude from the start. Obviously there is a lot of chasing in games like that, but sometimes it's quite fun.
I haven't gotten to the point of using flame and smoke markers just yet, but I think I favor the idea someone had where they used a pipe cleaner, fashioned into a "U" shape at one end, which fit snuggly over the wing of the planes, and was painted to be either smoke; or smoke and flame trailing back.
Same reason as we use many heights
I have a few pictures of the fire/smoke markers, none in Wow but they are from Blue max. I use the same markers (and same planes for that matter) in both games however so just ignore the hexagons and movement markers...
The first picture is a (horrible painted, our RNAS player have no taste) Sopwith 1 1/2 sniper, the second holds 2 1 1/2 Strutters. 2 Roland CII, 1 Fokker EIII, 1 Spad VII and my personal Albatross DII that I currently uses in Wow also. I cant wait to get all the WW2 planes also but I tend to forget my camera when we are playing.