hmmm... yeah, the circle now looks better, but I guess we'll run into visibility problems if the ground has a lot of objects on it (underbrush in jungle terrain, wheat field in farm terrain, "roof" tiles in the urban tileset etc.) because it might obscure the circle completely...
the shading routine used for path preview only re-colors the ground, doesn't it? is there a shading routine that also affects objects in the tile? if yes, perhaps make everything inside the circle flash red? including units and other objects, of course. that way, you can immediately see who and what will be affected.