This spell seems to be more between distances from one character to the other then place in the mist. To the goblins Dhalgren has total concealment and to Yobi Concealment. I believe he can see Yobi's silhouette and be seen as one himself, as the spell doesn't states blindness (though he can't see the goblins).

Edit: After thinking better about it, Dhalgren might not see two of the three goblins, but he can hear them and seeing the one on the cart he probably knows the overall direction of them. On the three squares untouched by the mist he probably has good vision, but he probably can't see the other squares with fog beyond 5 feet from his position .

 [hider=Spell text] 

"The vapor obscures all sight, including darkvision, beyond 5 feet. A creature 5 feet away has concealment (attacks have a 20% miss chance). Creatures farther away have total concealment (50% miss chance, and the attacker cannot use sight to locate the target)."

 [/hider]