Okay, that actually looks pretty good. Even better, it removes most incentive to have mega stacks (like your 100 unit stack) because the more stacks you have, the more efficiently you deal damage. I might be able to test this combat system after we finish up the Northern Alliance plains campaign, I'll try to formalize the rules by then.
Something like,
"Units fight together in Stacks. In Combat, Total all ATTACK values points for the first eight units in the stack. Flyers may not stack with non-Flyers (unless the non-Flyers are using the Flyers as Mounts).
Commander Bonuses – for each level of the Commander in the stack, increase the Command Bonus by 0.1. Commanders do not have to be listed in the first 8 units to add this bonus. If there is no Commander, the Bonus remains at 1.0.
The Chief Warlord is a Special Commander. In any hex with a Chief Warlord, the Leadership bonus of all Allied stacks is increased by 0.1.
Terrain Bonuses may be included in a later game, but this game will not have any Terrain except flat plains.
Ranged units on the Defensive inflict hits before the enemy has a chance to attack. Ranged units on the offensive may inflict hits, and, if the unit has move remaining, may leave the hex before the opposing stack retaliates. If a ranged unit attacks a ranged unit, combat is simultaneous. In order to use a ranged attack, the entire stack must be ranged. Non-Ranged Commanders may add a Leadership bonus only to a stack of Ranged units – obviously do not use their Attacks. Ranged stacks must always choose to engage an enemy ranged stack (if possible) before attacking a non-ranged stack.
Special Bonus – Specials include Dancefighting, Ditto-Mancy, etc. Default is 1.0. Rules for these will come as the game develops. In each combat after the first, this Special Bonus is halved. That is, a stack is attacked by two stacks. In the second calculation, the Defender’s special bonus value drops to 0.5. In a third combat, the value would drop to 0.25, and so on.
The only exception to this is if the Defending unit succeeds in ‘wiping out’ the attacking stack – ie, all attacking units are croaked. In this event, the Defending stack acts as though it had not fought any combats.
If a stack uses its Special Retaliation, its special bonus is at .5, the rules for Special Retaliation are described below.
Ambush Bonus – units that enter a hex without scouting can be ambushed. The Ambush value ranges from 1.0 (no ambush) to 2.0 (ambush).
Random Number – not every combat point means a hit. The Random Number adds a bit of luck to the mix. On (2d6+8)/20, 2 is 50%, 7 is 75%, 12 is 100%, etc.
Use the following formula to work out how many hits have been inflicted on the enemy:
Hits = Total Attack X Command Bonus X Special Bonus X Ambush Bonus X Random Number X (8 - Opposition Average Defence - Terrain Bonus) / 8
Round result to nearest whole number. This is reflected in the Spreadsheet which is also linked to in LTDave's signature, and is the xls file on this page:http://sites.google.com/site/erfworldempires/home/gobwin-bump-two
Special Retaliation: When a hex contains more than one stack, each stack may protect another stack once per turn, dealing a modest amount of extra retaliation. However, melee infantry stacks cannot use their Special Retaliation against ranged units, melee infantry can use their Special Retaliation against melee fliers which engage ground units, and while ranged stacks can use their Special Retaliation in any combat, if they use it in a combat which has one or more melee stacks, their Special bonus against the enemy stack is only at 25%, and they attack their own stack with a Special bonus of 12.5%The opposing stack takes the number of hits inflicted. Units are destroyed based on their stacking order – first unit listed takes maximum hits, before the next is wounded.
Exception – a stack led in attack by a Commander may direct hits at any unit in the opposing stack, but the unit takes TWICE as many hits to croak as it normally would. Opposing Commanders take FOUR TIMES as many hits to croak as normal if targeted. Obviously the first unit in a stack will never need to be targeted."
In case someone missed the implication of one of those rules, I included friendly fire.

After all, a little friendly fire makes everyone's day, right?
And, as usual, this is just me thinking out loud. If these are too complex, tell me and ignore them.