First off, I rule that Intimidate is an opposed roll. Your Intimidate, against their Will save + their Hit Dice. Well, it does say add all modifier to save against fear- and Will is a modifier against fear

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Why a Will save, rather than a straight 10?
Three reasons:
1. A straight skill check against 10 + Hit Dice is farcically straightforward. With maxed-out Intimidate and a respectable (+2) Charisma, you need to roll a 5 to intimidate someone of your hit dice (check=Hit Dice +5, DC=Hit Dice+10). You have a 50/50 chance of intimidating someone 6 levels higher than you. With a 'high-level' Charisma (+6), a synergy bonus from Bluff and an Intimidate-buffing feat (say Persuasive), the check becomes a joke. A roll of a *2* can intimidate someone with 5 levels more than you, and you have a 50/50 chance of intimidating someone with 14 more levels than you. In laymen's terms, a 6th level bard has a 50/50 chance of intimidating a 20th level character as written (9ranks +2synergy +6cha + 2feat vs DC30, needs 11), even though the wizard could slaughter/dominate/feeblemind/polymorph the bard as he sees fit in the course of a few seconds.
2. Higher level Intimidations should be higher. Even amongst characters of equivalent hit dice, it should get tougher to intimidate as the foes become stronger. When Barry is a 1st level bard, he should have a fair pop at intimidating Jim the 1st level fighter; but when he tops 20th level he should not have the same chance (or probably much easier, due to Cha upgrades and feats) of intimidating the archwizard. Intimidation seems less of a feature of a high-level game: when you've fought legions of baatezu, been dead and back thrice and have more magical booty than a small nation, you're not going to be that easily scared, even of someone of equivalent power.
3. Joined-up playing. Sounds jargony, but it isn't really. With any 'special effect' type of attack, there is an opposed roll, or at the very least the 'defender' gets to roll. The only exception is AC, but this is pure damage. Trips, disarms and the like are opposedl; Bluff is opposed (and is the closest to Intimidate); spells usually allow a 'save' (particularly mind-affecting ones). Why does Intimidate not allow a 'defence': it is unique in this respect. And a static DC is perhaps not indicative of the fluctuations in a character's willpower: a cliff is the same cliff if you climb it 100 times, whilst 100 1st level characters are not going to be exactly as 'intimidatable' all the time.
Regarding other aspects, I do play circumstance bonuses. Numbers should definitely give a circumstance bonus, although other factors should play a part.
As for 'roleplaying' intimidate, intimidate means just what it says it does. The characters intimidated are afraid of the intimidater. They won't instantly flee or whatever (they might, but just not necessarily) but they're definitely scared.
As for using on PCs, I do use Intimidate on PCs, and I expect them (in character) to react appropriately. It's all very well saying that the PCs must roleplay according to what they think, but if their character IS scared, and they roleplay as though he/she ISN'T, that's poor roleplay.