Well, straight up front - great job Stardock! Everything looks like you are living up to your promise of delivering the goods (and presumably WILL ultimately live up to it on premiere day!
), kickin' ass and takin' numbers. Well, more like crunching numbers just now, but still, hey, it's the least buggy beta I have ever seen. And one thing I'm really happy to see is - you don't take anything for granted this time.
Now, I - like many of us - OF COURSE have a few superb ideas which just absolutely cannot justify not telling you! Ah... that is, my five cents' worth of opinion. So here goes...:
1. Correct me if I'm wrong, but it seems to me that there is a finite number of heroes to get on map. And they die off/invalid themselves (sorry, the politically correct version would be - achieve a state of disability...) during the course of the game. My opinion is - a game which potentially gets to the point of "no heroes in faction/on map" is not so much fun. Thus, a suggestion - if the number of heroes in a faction drops down to a number equal to mapsize (1 being smallest), then after turn 100 random level 1 heroes start slowly showing up in your territory. If you're not interested in their services, they eventually leave paving the way for new ones. Or alternatively - if you have less than a certain number of heroes, every big battle can result with a "man from the ranks" showing exceptional skill and being promoted to hero.
Actually any idea guaranteeing that neither I nor my computer opponents ever permanently run out of heroes will work for me. 
2. Again, correct me if I am wrong, but it seems to me that the snakelike cities are still waiting for a suitable fix. Preferably not one limiting them to being a single generic spot on the map... My idea would be - limit the ability to add buildings much outside the "core" of the city.
Let us assume that we have the city centre established. It takes up 4 small squares (1 big square) and has 12 immediately adjacent small squares. It is a level 1 city at this point of course. So we allow placement of new buildings within 1 square (number = city level) of the core, which is the city centre. If we happen to fill all 12 of those adjacent squares, or rather all of them which are not filled by default (forest, water, resources etc.) then our core expands and we can start settling the new outer neighborhood. Again, within the 1 small square limit from the core.
If, on the other hand, sometime during our happy expansion our city levels up to level 2, then we get the opportunity to place new buildings 2 squares away from the core if we so wish (provided continuousness as it is now). Level 3 city would be 3 squares away max, etc. With this method the cities would develop "logically", not "snakelike", and still each city could be different from a round blob on the map.
An expansion to this idea would include each resource within city range being a small "core" on its own. Small = half the placement range of city centre, rounded down. So if you had a level 4 city and a gold mine linked by buildings (continuousness) to your city centre, then you could place new buildings 4 small squares away from city centre OR 2 small squares away from the core created by the gold mine, if you so wish. With this method the cities could - again - develop "naturally" and meaningfully, just like real cities (which usually are not snakelike but often expand around nearby points of interest like factories or theme parks for example).
3. Think about adding more random events and event sequences. And don't forget to decide about those events a few turns in advance so a simple spell of game reload won't fix the bad ones or generate good ones.
Speaking of event sequences, an example of my thinking:
Turn 33 - Thieves! A guild of daring thieves has been established in our capital of Frog Pond and raided our treasury for a total loss of 23 gildar!
Turn 46 - The thieves guild continues its nefarious practices in our capital of Frog Pond! Our people are scared (temporary malus for city growth and cash). What are your orders, my King?
Player's choice:
a) Not in my city, you won't! Dedicate men and funds to the hunt! [invest a small amount of gold, lower health of all garrisoning units by 50% to simulate detaching them for police duty, get increased prestige and a chance to get money and items from busting the thieves hideout sometime later. There is still a chance of the thieves evading capture and continuing their practices with vengeance or them moving to a different city]
It's all a matter of perspective... Try to enlist them to our cause! [invest gold, lose prestige, get a chance of a random event later giving you a "rogue" hero or establishing a thieves guild in another faction of your choice. There is a chance of the thieves spurning your advances and operating as before, thus leaving you with both lost gold and prestige and continuing the event sequence]
c) Bah! Let the city authorities sort it out by themselves! [effect - will get random negative events like this for the city until the thieves guild is disbanded or caught by a separate random event]
Let's assume we went with
...
Turn 49 - Contact has been established with a frontman of the thieves guild in our capital of Frog Pond. They are amenable to our diplomatic overtures, but require further funds as a token of our good faith. What are your orders, my King?
a) In for a copper, in for a gildar... pay the rascals! [lose some money, big chance for positive event soon, small chance for further extortion, small chance of thieves breaking "negotiations" and going back to negative events]
Is this a joke? Give the frontman a beating up the front, maybe they'll get the message I'm not to be trifled with! [small chance for positive event soon, small chance for further extortion, big chance of breaking negotiations]
c) Imprison the frontman and torture information out of him! [break negotiations and get back to negative events without chance to negotiate ever again with this group; a chance of catching thieves and busting their hideout for money and items]
Let's assume we went with a)...
Turn 51 - The leader of thieves guild in our capital of Frog Pond decided to accept our offer of association and cooperation! Should we retain his services in our Kingdom or send him on a mission to a rival faction?
a) His services are needed here. [gain a "rogue" hero with some items and perhaps one squad of "thieves"; thieves guild sequence ends for Frog Pond]
Send him to Pariden. [thieves guild sequence ends for Frog Pond and starts for the biggest city in Pariden]
c) Send him to Kraxis. [-//-]
d) Let me teach you a thing or two about taxes... starting with basic racketeering! [lose all caravans from Frog Pond, gain extra income in the city and a chance for getting random items once in a while; extra "thief" unit in the city militia; temporarily lose some prestige; thieves guild sequence ends for Frog Pond]
e) Good, finally! Let me introduce him to the headsman! [gain money and items from the thieves hideout, get a random positive or negative amount of prestige temporarily; a chance of some aggresssive thieves bands appearing at faction borders; thieves guild sequence ends for Frog Pond]
That's it for today, hope I didn't bore you. 