Possibly a good strategy would be to follow Paul Graham's proposal in What you can't say? and make an effort to implement internal radical honesty whilst being much more careful about what you communicate.
I've never practiced Radical Honesty, nor do I know anyone who does, so my thoughts on the subject are pure conjecture. Still, it seems to me that Radical Honesty could only be practiced by someone who is independently wealthy. If you can't afford to lose your job, or that apartment you're renting, or a couple teeth during your bus ride, you simply can't afford to alienate the people on whose good will your well-being depends.
If everyone in the world was 100% rational and a Radically Honest person, this wouldn't be a problem. Unfortunately, we don't live in a world like that. Instead, we live in a world where little white lies (and especially lies of omission) are the norm; they are the glue that keeps a society (which is composed of less-than-rational individuals) going smoothly.
I suppose that you could practice Radical Honesty by behaving like an Aes Sedai, and speaking statements that, while literally true in a technical sense, imply something very different than it would appear to the listener. I think that would defeat the spirit of the movement, however. Lying creatively is still lying.
Also, there was a different fantasy novel (title and author forgotten) where the folks who were required to be honest used ambiguity and such to stay out of trouble. As a result, most people mistrusted them.
For that reason, and those listed by Bugmaster, I've considered doing a realistic variant of Radical Honesty. Specifically, one would need to account for the full range of social and communication customs, and rather than try to act out some blunt idea of honesty, the goal would be to avoid deception. Deception means, roughly, using someone's expectation of your truthful representation, to lead them away from a belief you deem true.
This standard would differ in that, for example:
It would not require you to give precise, accurate answers to "How are you doing?" (and other small talk) because people do not expect your answer to be strongly indicative of your exact state, and therefore will not be misled into believing excessively positive things about your state if you answer "Good".
It would not require you to say negative things you believe about others to their face. This is because of the information contained in how far a belief of yours is from common knowledge) itself affects their belief distribution. When you say, "I don't like that tie", you're not just changing their beliefs about your opinion about the tie; you are conveying that you want them to know your opinion, and for you to know they know, etc. which has significantly different consequences for their model than the object level knowledge of your opinion.
It would require that you not be ambiguous in cases where your ambiguity would, based on their expectations and trust in you, lead them to believe something farther from what you think is the truth.
Your approach sounds good, but it also sound like plain, ordinary, run-of-the-mill honesty. It's not very "Radical"; and many (though, perhaps, far from most) people already practice it every day.
But perhaps I am missing something ?
Sounds a little like the Merry Gentry by Laurell K Hamilton, where the fey seem to work like this. I'm sure there must be a clearer example though.
There's also Heinlein's Fair Witness idea, who seemed to be more positively regarded.
Not read Wheel of Time. User:Bugmaster already referenced them so I assumed User:NancyLebovitz was thinking of something else.
The Fair Witness idea is not entirely analogous, since (IIRC) the Fair Witnesses have a pre-appointed niche in their society. They are highly paid and highly respected; and Radical Honesty is, in fact, their primary occupation. Our own society does not contain a niche like that, however; and no one can get paid solely for being Radically Honest.
On that topic, I've read papers on how lying to others increases self deception, but all the papers I've read had someone tell a blatant lie. I've never read a paper where the subject was saying something misleading, like you mentioned with the Aes Sedai. I imagine the effects would be very much the same. Have any studies been done on that?
It appears your link to the article is broken. Try this one instead. http://lesswrong.com/lw/j9/radical_honesty/
Today's post, Radical Honesty was originally published on 10 September 2007. A summary (taken from the LW wiki):
The Radical Honesty movement requires participants to speak the truth, always, whatever they think. The more competent you grow at avoiding self-deceit, the more of a challenge this would be - but it's an interesting thing to imagine, and perhaps strive for.
Discuss the post here (rather than in the comments to the original post).
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