I've been thinking about this topic a lot, because I agree that religion seems to be a bit "flat". the post I agree most with from this thread is Indirik's from the first page, especially:
Forget that separation of church and state stuff. I want more religions involved in more stuff. I want official state religions. I want realms to use their militarily power to export their faith to other realms. I want religions to be telling realms what to do.
I think religions, in the eyes of clergy, exist for two reasons:
1) to spread a set of beliefs
2) to gain power, wealth and influence
The first is purely RP for us. None of us actually believe in the religions, so few of us do much to RP that we have a terror of everlasting Hellfire if we stray from the True Faith. This bit is here just for the RP fun.
The second is where I think we can expand the game a bit. I picture a founder of a major religion to be on par with a Duke, but game mechanics give them almost nothing. I'd like to see a few things added that would make religion an alternative way for characters to climb the power ladder.
Some random ideas, not all of which are good or practical, and are more for brainstorming purposes:
1) church receives taxes from regions, based on what % of believers they have
2) church receives additional taxes from temples, based on level
or, perhaps a temple or shrine allows you to collect taxes?
3) new rulers (maybe only Kings?) must be "crowned" before they take office (could lead to an elder refusing, and the new ruler shopping around until he finds a religion that will rubberstamp him)
4) ruler's religion automatically becomes State religion, with good/bad effects
5) elders of state religion may receive additional votes, like a Duke or Lord would
6) founders/elders may sponsor armies
7) a "founders" channel, like ruler, banker, general's equivalent
There's a few ideas to discuss. I'm sure there are plenty more better ones out there.