Heh, whatever I do normally ends up with religious themes and dragons in it - even the hard scifi. So the campaign I DM is pretty Christian (OK, it's medieval Europe, it's got to be Christian). It's not about the game mechanics, it's about how the characters react to stuff... and the cleric is played very well. If you've read the early pages of my strip, you'll know what I'm on about; if not, well, let's just say he's very willing to give monsters the benefit of the doubt. Oh, and he's killed a sentient, living being precisely once so far (in the comic, at least).
Honestly, game mechanics are secondary to the spirit and goals of the game, which can be fairly easily tweaked.
Now, as to the subject of magic... a party with a Christian priest and a mage in it would have problems if I stuck with the common view of 'magic is bad'. Fortunately, the topic's a little more confusing than most people believe. Just looking at real history, with the aid of the Chambers Dictionary of World History, I can state that "In England, where white or harmless magic was recognised by Common Law as not identical with the malefica of witchcraft proper"... Isn't that interesting?
Now, white magic is in no way related to fireball-slinging. So I had to go an extra step, and elevated magic to the level of technology. In fact, the future timeline of my campaign has some very interesting advances, including spells above third level. In this case, I assume that the source of magical energy is purely natural, and follows principles that (while not fully understood by Medieval thinking) are just like, say, radio reception. The priests are trained in a similar field of endeavour, except they don't draw on elemental powers, they draw on positive energy.
Now consider Amish folk. They disapprove of technology on religious grounds, or so I'm told (don't have any in New Zealand). Consider, then, what would have happened if magic had the same credence as tech; there would be people denouncing it, but they'd be a distinct minority.
Well, I think that's about covered my behind. Just wanted to say: I've done it, and you can too; it's all in the way you look at things.