mythago said:
fusangite, I don't know how correct you are in arguing that philosophy brought down polytheism, but I don't agree that polytheism and scholarship need be incompatible. Heck, some monotheistic religions flourish despite profound internal contradictions. 
In Mesopotamia, polytheism was in part a function of the political city-states.
Mythago, I didn't mean to suggest that generally polytheism and philosophy are incompatible, just that this seems to have been the case in the West. As you correctly point out, ancient Babylon, like medieval India and China seem to have had no problem with this. But for whatever reason, the way that Europeans think about gods seems to make the co-existence of philosophy and polytheism problematic and unstable.
jgbrowning, I'm intrigued by your book; I gather it's a hybrid of a gaming manual and academic treatise. If you don't mind, I'd love to hear a little more about the project.
I think one term that this discussion seems to be missing is syncretism; while it's typically been a term applied to the hybrid Christian faiths which have grown out of the meeting of pagan indigenous cultures and Christian missionaries, increasingly, Europeans are applying this idea self-reflexively to help explicate medieval Christianity.
Another observation I'll throw into the mix is that our conceptions of God and gods are all filtered through our individualistic worldview. The idea of a peer to peer relationship with a deity or the state is an advent of the last 500 years, growing out of the theology of the Reformation. Max Weber has written an excellent book on this.
To truly understand the interaction of the medieval mind with religion, we must remember that medieval Europe was a corporate society in which people related to authority via their community. The church organization, until the advent of Luther, was viewed as indispensible for ordinary people to relate to God. In the Byzantine world, the state was similarly viewed.
Therefore, in designing a religion for a fantasy world, one might be better served by asking what kind of organizations are involved in the process or worship, how they fit into the rest of society and how people like the characters interact with these corporate entities. Perhaps all this discussion has been too abstract because our modern minds naturally assume that doctrine determines organization; perhaps we should turn this on its head and posit that organization determines doctrine.