Anyone know if there's any mods for BG which show the area of effect, ie a circle, when casting aoe spells llike fireball, so you can accurately know if your spell is going to inflict friendly fire?

That's definitely something modern CRPGs have drastically improved on, isn't it? I have always avoided AoE spells except for opening fireballs in BG1 and 2 for this reason.

Anyway, I know of no such mod but if you find one make sure to post it.

Use fire protection items and spells on your melee characters, and then proceed (without much worry and much amusement) to abuse the use of fireballs and etc. Make it rain.

For Fireball, my rule of thumb is the edge of your character's vision, or the furthest visible edge of the fog of war.