Okay, a couple rules issues I've noticed, and my thoughts...
1: Mounts with multiple riders. Does the mount average the stats of every rider? In theory, I could put together an "exploit mount" with a crazy high attack and two riders, run four of them in a stack of 8 and raise the attack of the entire stack for a minimal cost. What makes sense to me for mounts with multiple riders is to simply count the mount as a separate entity from its riders altogether - but they grant their movement type to all mounted units. So a mount with tunneling could carry its passengers, and a mount with flying grants flying to its passengers.
2: The "huge stacks" problem. Currently, a stack of 300 units could overwhelm anything it comes into contact with, multiplier or no - but I believe it's story canon that stacks have an infinite number of possible units, but the bonus caps out at 8. A solution to this would be to interpret that as being the bonus only applies to eight of the units in the stack
. This makes it disadvantageous to group your units into stacks of more than eight, except in the instance that you have one or two units that would be on their own otherwise - by grouping those 300 units into 37 stacks of 8 (and one stack of four) you get 296 units with a combat modifier (and four with a lower one) instead of a stack of 300 where 8 have a combat modifier and 292 do not.
I think we can alter the combat mechanics as well - instead of adding up each stack's capabilities the units pair off against each other, either at random or in a predetermined order, and deal damage over a number of "combat rounds," where a maximum of 8 units (or double the lesser stack size - so 2 on 1 works, as well as 4 on 2, but no 8 on 1 fights) can participate in a round. A unit with a Warlord would be able to allocate combat damage to priority targets, but would still be open to a maximum of eight of the opponent's counterattacks. Archers get their hitsies, target that siege! In between combat rounds, assuming the player is paying attention (a player-gm instant message setup, I think would work), a side with a Warlord could also make new decisions regarding targeting, or choose to break off the attack or engage a different stack.
With this, in cases where stacks of wildly differing sizes engage each other - 300-stack archers versus 37.5 8 stacks of the same, neither side with leadership - the larger stack would engage the first small stack and fight to a draw, then re-stack between engagements and engage the next 8 stack, then re-stack between engagements and so on. The difference is that when fortune favors the larger stack, only 8 opponents die and the next engagement begins. When the 8-stacks roll well, however, they move to the next combat round - except that the next group of soldiers from the 300 haven't re-stacked yet, and so don't have a stack size bonus. Now the chances of the next group of enemies from the larger group don't have a stacking bonus, and cause only minimal harm to the dwindling Archers with stack bonus.
Uh, hope that makes sense. Basically gives Warlords more power over the engagement and makes stacks of more than 8 a shot in the foot, but will probably require a new excel sheet to calculate battle results. It's weird because for everything else has canon to base it off of, but Erfworld actually fights in real time, making it difficult to observe the mechanics in place.
3. There was mention of a terrain-based side getting the terrain-capable bonus for free? If that's the case, it doesn't makes sense to not
be a terrain-based side. Non-specialized sides should have an incentive as well, but then we're straying away from canon, unless side-specific abilities are simply yet-to-be-mentioned. The ability to, at side creation, grant all of your units an ability of some sort for free is kind of cool, but exploitable as I see all-flying sides dominating shortly thereafter.
4. Shouldn't "heavy" status provide some sort of bonus as well as its penalties? I'm thinking +1 defense - a small bonus, but it makes it worthwhile to consider promoting 10 HPers beyond very limited circumstances where gravity can make them cross battlespaces. Also, it seems to me that Parson is exploiting a rule that says units can be upgraded in a "city" (or maybe capital) but that doesn't specify which city. Could make for an interesting tactic where a bunch of low-levels breach the castle wall, then you dump Schmuckers into the survivors to upgrade them in the midst of battle. Also, there doesn't seem to be a rule where you can force an upgrade of a unit, but I believe this capacity has been noted in-comic - it would be a relatively simple thing to implement. Maybe a $100 = 1 Exp, no upgrading units beyond 3rd level sort of thing?
But what happens when a unit levels? It's been implied that units of different levels have different stats, so maybe a +1 to two random stats every level with a floating chance of gaining a special could work, representing the fact that different units grow differently (and of course giving the players' warlords personality). But that would be a lot of bookkeeping for non-warlords, so maybe they should just get set bonuses every level - either laid out ahead of time by the owning side or determined by the rules. My idea is +1 combat and move at 2nd level, +1 defense and hits at 3rd level, +1 simple special ability at 4th level, +1 to all stats at 5th level and +1 complex special ability, but non-warlords can never advance beyond this "elite status". Promoting a unit causes it to carry over its previous stats/abilities, but while gaining a Warlord's upkeep - the typical case being that promoted units have lesser stats but more specials than natural Warlords, and also higher loyalty due to being non-royal.
I'm afraid that #5 has become a multi-part question.
5. In the current RAW, do you get a flying scout AND a foot scout? Or one or the other? Same question for mounted vs unmounted Knights. I would assume both.
6. Okay, so the simple-mancy special is meant to reflect the Archon's natural abilities if taken twice - the Archons being a "Knight"-class unit. Only the "heavy" knight can afford that AND flight, but the rules seem to imply that a knight can only have one "High-Level" ability - clarification that you can take the same one twice? Also, can "breath weapon" only be taken once, or can you stack fire- and lightning- for +16 combat? Canon seems to be each color Dwagon has one breath attack, but it's not explicitly stated either way.
7. So it's stated that the Titans tend to give sides what they need as far as casters go. Does this mean that each side will assemble a "wish-list" for casters, increasing the chances of drawing a specific one from the pot? Or has it been decided that when a caster pops, the side receiving it gets to decide what kind they want? How will two-caster linkup powers be judged? I know the magic system is still under way, so don't worry about these if you have no idea yet.
...that's all I've got for now. I'll be back next time with suggestions for unit abilities to add to the list.
EDIT: Here's a couple I just had. Neato.
Simple Ability: Superior DrillingThis unit has been drilled to death by their commander - or rather, this commander drills his units to death!
A unit with superior drilling is better at working together with his comrades. The unit's stack size bonus increases by one step, and if the stack size is 8 and all units in the stack have superior drilling, the stack bonus becomes a 2x modifier. This only affects the unit with Superior Drilling - one SD unit in a stack with 7 who don't have it doesn't grant this bonus to the rest.
Complex Ability: Masterful Drilling (4 points)These guys are REALLY good at mining - oh, wait...
A unit with this ability has grown to trust its comrades in a way that few other Erfworld units have. A Masterful Drilling unit gains the same benefit as a Superior Drilling unit, with an addition. If a stack consists entirely of identical units with the Masterful Drilling ability, the unit gains a leadership bonus equal to the level of its highest level member and counts as a lead stack. If a commander-type unit (any unit with a leadership score) obtains this ability, he gains the ability to grant the benefit of Superior Drilling to any stack he leads, as long as he leads it.
Simple Ability: Plains CapabilityThey're not desert fighters, snow fighters, or mountain fighters. They prefer to fight in perfect weather on green grass - you know, really enjoy it.
A unit with this ability is so nonspecialist with regards to terrain that it has become an advantage. This unit can see into adjacent hexes while on Plains and Hills even if it is not a scout, and scout units with this ability can see one hex further whenever they can usually see an adjacent hex due to terrain, and see two hexes away on hills. This ability does not grant a 50% combat bonus in any kind of terrain, just the sight bonuses.
Simple Ability: Marine Semper Fi.
This unit is specialized in something. Specifically, taking names and kicking boop! When this unit attacks from a naval unit's cargo bay, it gains a 50% combat bonus as if fighting on favored terrain. This unit can also contribute to a naval battle by attacking the troops that enemy ships in the engaged stack are transporting. If the naval unit isn't transporting any units, they can target naval unit itself - treat this attack as if the targeted naval unit is being attacked but cannot retaliate, such as from being out of range.
This attack can only be made against enemy naval units in the same hex as the Marines attempting to engage it, and only if the unit used to transport the marines engages the stack that contains the target naval unit for a minimum of one combat round. If a lead stack including the marines' transport ends combat without taking the marines with it, the marines are left to fight it out on the ship they were dropped off on. There is no reason marines can't perform this attack off of a flying mount, but they will not gain their favored terrain bonus when doing so.
If a stack of Marines reduces a target naval vessel to 50% of its HP or less, they cause that vessel to turn - but one of the Marine units is "disbanded" in the process, used to crew the new ship. Ships acquired in this fashion inherit their original faction's base stats, but have their XP total changed to matched the Marine expended to crew the ship. If this causes the ship to move up or down a level, recalculate all stat values accordingly. The ship captured retains any damage that it sustained while being captured, and will join that stack that the Marines' transport vessel belonged to until combat is over, at which point it may re-stack like any other unit.
Simple Ability: AeronautHe's a strange one, enjoys jumping off of Dwagons' backs and onto his enemies...
A unit with this ability gains a +50% terrain bonus when fighting from any mount with the flying ability. If bought with the "Riding" ability for a unit's base stats, reduce the cost of the abilities by one - so you get both for 3 points. Naturally, this ability is worthless on a Heavy unit.
Complex Ability: Combat Medic (4 points)I'm not a Healomancer, but I know how a bandage works.
This unit has received first-aid training, gaining access to a very limited form of Healomancy. When this unit's stack ends a combat - either by defeating all enemy units, the enemy unit's commander calling a retreat, or this unit's commander doing the same - every casualty the Combat Medic's stack suffered has a 10% chance of reviving, fully healed, at the start of the next turn. This number is rolled in secret by the Titans, and a Combat Medic can only use this ability once per turn.
And a couple more rules points...
8. Shouldn't hills and mountains grant a sight bonus when claimed? I'm thinking one hex would be sufficient, with scouts getting two. For that matter, shouldn't flying units be able to see one hex away - with the exceptions being into forested, mountainous or city hexes?
9. Tundra and Plains do 20% damage per turn, but everyone heals at the start of every turn. Should be a clause preventing this, or was it intentional?
(current thoughts on an army, in case you want a second test side to run tests with)
Oz Empire Army Details
Name (Type) [Upkeep]
Hits - Combat - Defense - Move
Mosh (Stabber) 
5 - 5 - 1 - 3
The Mosh - usually grouped into pits of 8 - are the fast assault unit of the Oz empire. Their strength lies in numbers, and also in their uncanny ability to fight hard in the cold of winter, despite being armored only in concert T-shirts and equipped with only their heads.
Mass and stack on dance fighting + leadership, could be awesome. Other than that very fragile, so keep them out of engagements that will take more than 2 combat rounds to resolve.
Crew (Piker) 
7 - 2 - 4 - 3
Garrison, Tundra Capability
The Crew, an essential part of any venue, are the ones who keep the home front in good repair. They are a part-time force, seeing little action outside the occaisional emergency when Oz is invaded.
Required in every city.
Roadie (Piker) 
7 - 2 - 4 - 3
The Roadies, an essential part of any band, are the ones who make up the bulk of Oz's army. In addition to being irreplacable in any campaign abroad, the Roadies are also charged with defending the Bus Stations, the Randy Roads, and the most distant borders of the Oz Empire.
Defense in depth, so spread them out. Mix into your other infantry formations and Roadies can absorb hits for the weaker units, albiet while weakening the overall combat of the stack.
Fans (Archer) 
5 - 6 - 0 - 3
Ranged, Garrison, Tundra Capability
No band is complete without the fans at home - they sometimes buy the CDs, always pirate the MP3s, and occasionally shoot enemy flyers.
Also required in all cities, but less important in cities with an AD tower.
Groupies (Archer) 
5 - 6 - 0 - 3
Ranged, Tundra Capability
Eventually, the most rabid fans become groupies - buying ALL the CDs because they can't afford a laptop to download the MP3s onto, following the band around and protecting it from aerial attack with longbows.
Mix into the outer ring of a moving multi-hex formation in order to hit approaching flyers. We don't have many of our own, so this is very important against aerial-focused sides.
Agent (Scout) 
3 - 0 - 0 - 5
Scout, Builder, Surveyor
Every band needs an agent - and with all the bands Oz manages, they need a lot of Agents. Though not useful in combat, they have a good head for numbers and can serve as able long-range scouts and support units to the Empire.
Very important to make money - they pay for themselves at level 1 on a mine, level 2 on a lumber mill or wharf, and level 3+ on a farm (depending on how good the farm is). They pay for themselves when assisting in the production of buildings / upgrades that cost 2,000 Schmuckers or more at level 1; 1,000 at level 2, 667 at level 3, 500 at level 4, etc.
Air Guitar (Scout) 
3 - 0 - 0 - 7
Flight, Scout, Mount, Tundra Capability
The rock offshoot of an Orly, the Air Guitar is the go-to scout and single-unit transport accross the Empire. If you're wondering, you ride it by standing on it like a surfboard.
Very cheap way to set up an intra-empire relay system. Put one in each city, or in a gas station if the cities are more than 7 hexes from each other, and move warlords to the next city, where they change to the next mount and take that to the next city, lather rinse repeat. Also good for supporting an infantry column with close range scouting.
Studio Guitarist (Knight) 
10 - 5 - 5 - 5
Rider, Leadership, Dance-Fighting, Tundra Capability
Though not techinically members of the band, the Studio Guitarists are just as essential a part of its sound as anyone else. They are capable of rocking out, giving their entire stack a dance fighting bonus from heabanging - Mosh Pits are especially effective deployed in this fashion.
These guys are basically mini-Warlords, and after a few levels may become better than Warlords in many respects, thanks to a fixed 90 schmucker upkeep. Put them each in a different stack to optimize bonuses, turning an army of cheap infantry into a deadly dance-fighting force.
Backup Singer (Knight) 
10 - 4 - 4 - 5
Heavy, Flight, Simple Thinkamancy, Simple Foolamancy
The rocking sisters of the Archons, the Backup Singers are no less potent. Born with innate magical powers - powers that grow with the Singer - they are quite powerful utility casters in areas that the Empire's primary casters fail to reach.
Archons are awesome, right? Keep one at home until a dedicated Thinkamancer pops to maintain diplomacy with neighbors. Have them follow around the Warlords to provide combat support services, but keep them clear of combat itself. When they catch a level by spamming veils every turn (whether needed or not) they become even better by collecting Randomancies.
Chopper (Special A) 
6 - 3 - 3 - 12
The preferred combat mount of the Oz Empire, the Chopper is quite possibly the most awesome thing ever made by a human. It's fast, and that makes it dangerous. It's JUST as dangerous to the rider, and that makes it cool. Too cool for words, so I'll shut up now.
These fall apart out in the cold, so keep them in cities and gas stations until they're needed - a fact that also makes them less appealing for the intra-empire relay system. As such, they are most useful at the empire's fringes, where there is less snow to damage them, and where cities are more distant anyway.
Undecided (Special B) 
6 - 3 - 3 - 3
Dyr Woolf (Special C) 
6 - 11 - 3 - 3
Siege, Tundra Capability
The northern cousin of the Wienerrammer, the Dyr Woolf is the go-to siege engine of the Empire. It's not cheap, but it's not weak either - only a partial stack of these is necessary to take a city, and that makes the investment easier to protect.
Keep in the column's interior, covered by archers until they hit the walls. These are too expensive / fragile to risk in open combat, but are semi-capable of it in a pinch. Oddly enough, these can be cycled in and out on Choppers / Air Guitars, so risking them on a march isn't necessary unless it is 24 or more hexes.
Lead Zeppelin (Special D) 
21 - 6 (14) (20) - 10 - 12
Heavy, Flight, Fire Breath, Mount, Battlecrap, Tundra Capability
The Oz Empire's greatest war machine, the Lead Zeppelin corps is the pride and joy of the Oz Empire. They bombard the enemy from above with fire and ferry the most potent warlords to battle. Despite their power, the Lead Zeppelin is fairly fragile to enemy assault, and so is most useful wearing down opponents who can't fight back.
Combat is 14 versus all, and 20 versus ground units - 21/30 while in tundra (with 15 defense). Transport capacity is 3 units - make one of them your warlord, and another one a studio guitarist, and your looking at 18/24 plus the warlord's leadership. Then you get another Lead Zep into the stack and put 4 more "rider" units on them both and go to town.
Explorer (Sloop) 
6 - 2 - 2 - 9
Cargo 8, Water Capability
The Explorer takes on the scouting role in a naval fleet, but are really used to keep tabs on distant waters. They can ferry troops, but are too weak to make a real go of it, risking the soldiers placed on board.
Avoid combat, fill up as much of your world map as possible and sell it to other factions. Hey, it works as an early method of gold generation in Civ, why not in Erf?
Armored Galley (Galley) 
8 - 8 - 8 - 5
Cargo 16, Water Capability
The Armored Galley is where the real navy begins. They aren't much for combat, but can be a somewhat reliable transport over distances, especially if they avoid combat - but in ship to ship combat they assume a support role.
The Armored Galleys go on top of the stack, and soak hits for the War Galleons, which are the real movers and shakers.
War Galleon (Galleon) 
10 - 20 - 5 - 5
Cargo 30, Water Capability, Ranged
And the War Galleons are the Lead Zeppelins of the sea. They bombard the enemy from outside their range and are crewed very carefully by their captains.
Keep them in unengaged stacks and bombard enemy ships, starting with the ones carrying troops. If engaged directly, a War Galleon will kill many and suffer heavy casualties - avoid, or assist with Backup Singers.