I'm going to point Gary and Ross at this thread, but in the meantime I'll address some specific comments.
Make it an actual FORUM and not a blog style posting system. This promotes conversation. The current Paizo board is tied to the store item comment function making posts less conversational. This should be separated out.
Hmm, I see many posts on the Paizo boards that aren't linked to product entries. You do realize that you can start a new thread, just like any other message board, that isn't tied to a product, yes? Or am I misunderstanding you?
Also, lots of topics are nearly impossible to find because of archiving.
Well, the Paizo site does have a search feature, I use it often. I can't find ENworld's search function, perhaps because I haven't renewed my supporter status when I drifted out of the industry a few years ago.
Look at some forum packages Sean. there are some really good ones out there that are not so bad to work with and/or do not cost a crap ton of dollars. I am partial to Vbulletin and Dragonfly CMS.
Well, I'm not a tech guy, but I assume there's a reason Gary and Ross are doing it the way they are--perhaps something integral to our storefront software. But like I said, I'll point them this way so they can read these comments.
1. Navigation: You should make it show a little less in the default display. For example: Instead of having general on the main page and then the top 20 topics displayed and then class discussion and the top 20 in that forum displayed, make a clean option where you can just see the forum name (general, class discussion, product discussion, etc,) and the most recently posted in topic. As it stands your forums main page is 10 miles long, and I never make it down to the lower sections after scrolling through copious amounts of topics to get there.
I admit, we have a lot of topics, because we have a lot of product lines. Have you tried collapsing categories you're not interested in? For example, I'm not a Pathfinder Society GM, so I don't read their message board, and leave it collapsed so it just takes up 1 line on the page.
I think the first thing you could do is, to put it bluntly, to actually have a forum. Right now it is just an over abused blog commenting system. It is extremely hard to find anything, and all the subboards makes it hard to find anything. So, make searching easier, alter the organization to make things easier to find, and change to an actual forum system.
As with the first person I replied to, I'm not seeing how the Paizo boards are a "blog commenting system." Yes, you can reply to the posted entries for the various books, but you can start unique threads, just like any other board. Again, unless I'm misunderstanding you. As for the sub-boards, they're divided by product line (Companion, Chronicles, Gamemastery, Modules, Adventure Paths, Pathfinder Society, etc.), just like you might have boards for Dark Sun, Eberron, and Forgotten Realms, or D&D, GURPS, and Traveler... I don't see the difficulty. Of course, I've been using those boards for a year and I admit there are a lot of topics and at first they can be overwhelming, but there's a logical structure to them, IMO.
Now having posted there, the interface does not meet my expectations. What's worse, I can't hot-link images or even measly thumbnails

.
What sort of hotlinks do you want? Like, click a button, a pop-up appears for you to enter the URL of the image, click OK, and it drops the link in for you? You can put links in using the current setup, you just have to use the BBcode. I admit, being able to click-paste-click a link would be very handy.
On topic; the Paizo boards are a beast; there are so many "forums" that everything is beyond fragmented to the point of uselessness.
This response confuses me, because it looks to me that ENworld has a similar number of forums you can post in (about 30 or so). Perhaps it's just that you are familiar with ENworld, and perhaps saw it grow from something smaller, and thus know exactly where to find things? I look at the forums here and I'm often confused as to where I should post something because there are so many options. I'm not saying one is better than the other, I think in terms of complexity they're pretty similar.