RED's mod is nice. It visually changes some units so they look more unique, based on the Civ you're playing as, sort of like how in Civ IV Asian warriors looked different from European warriors. It also rescales them and adds more units to each 'group' -- so what used to be one battleship turns into a group of two. It doesn't alter the gameplay at all, but it adds some nice flavor to the game.
CivUP and VEM are supposed to be good mods that alter and rebalance the game completely, but I haven't tried them out.
Also, yeah, diplomacy is in a much better state today than it was a year ago. It's still not 'perfect,' but the whole game has improved a ton since then. It's like a totally different game from how it launched.
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"When I was a young man, I had liberty, but I did not see it. I had time, but I did not know it."