Wow, a whole interesting thread gets spun off a debate I'm having elsewhere and no one invited me.
It sounds like you've already got lots of good advice, Ace.
I do want to discuss the nature of D&D militaries just a bit further.
First, have you read The Illiad? Assume D&D martial activities follow the implicit rules of The Illiad. That is to say, for the most part success in battle depends not on bringing the biggest army, but on bringing the most heroes. But that doesn't mean that the army is itself useless. Even for a high level character, one hundred 3rd level fighters constitutes a significant threat. The assumption of fantasy is that actions of the heroes determine the battle, but that some form of army is required to carry the day versus the other sides heroes.
It is not necessary to counter the PC's use of magic by turning magic into technology. It is however necessary to assume that magic becomes as much a part of a nations defences as castle walls and more so. You have to assume when the castle was built that the King contracted wizards as well as engineers to build defenses of various sorts into it. These can be subtle, but they should be pervasive especially for ancient and powerful nations. The gates of the castle can be +2 enchanted objects - no unenchanted battering ram can harm them! Teleportation spells activate magical traps or cannot be done at all. Invisibility activates alarms or dispel magics or whatever. Ships of war have flame resisting spells laid upon thier timbers, and so forth. Ubiquitous magic doesn't necessarily mean everyone in the army has a +1 sword or that there are flashy effects like ray guns of disentigration everywhere. It can simply mean that magic is a part of the culture of the world at a very deep level. Ideally, if this is what you want from the world, you take steps to makes such low level magic easier and more natural than flashy effects and leave the flashy course of the world altering stuff to the PC's and thier foes.
This may significantly alter what a list of common magic items looks like toward 'Goblets of Wine Chilling' and 'Needles of Sewing' and 'Robes of Finery' and 'Everflowing Salt Shakers' or 'Hall's of Safety' and 'Masonry Blocks of Long Enduring' and 'Coats of Water Repelling' and 'Boats of Swift Transport' or whatever. The weaponry of magic can be both rarer and more exotic (and probably richer in history) than what we are used to in cannonical D&D.
(Tolkein fans will probably note that my taste in magic is heavily influenced by Tolkein - more pervasive in some ways, less pervasive in others.)
Remember, the world is vast. Just because you want magic to be rare, doesn't mean that it doesn't exist. Just because you have magic employed in modernistic ways, doesn't mean that the world has to take on a modern culture. Maybe that one city _is_ fabled for its magical lights which light the streets in many fantastic colors throughout the night. That doesn't mean that every city will have the wealth or desire (or rubies!) for such features, and if everyone tried imagine what the price of rubies would be! Maybe that one city does employ legions zombie labor. Maybe that other city is famed for the golems in its army, and in another they employ mastadons. In fact, the world is probably large enough for every thing you can think of.