I like the idea of armies, but they way they are in C3C now is pretty broken. There's three main problems:
1) The AI doesn't use MGLs to create armies. With no victorious armies, they can't build the Military Academy. So the AI never has any armies.
2) Even if ithe AI is given an army, there's a bug with loading them. The AI will not add a unit to an army if the unit's movement is less than the army's movement. This sounds like a good idea to prevent mixing slow and fast units, but it doesn't consider the movement bonus that armies have. For example, if the AI puts a cavalry in an army the army has 4 moves, then it thinks that all 1, 2, or 3 move units are too slow to be added to the army, and the army will remain unfilled forever. The AI can fill armies if it puts a slow unit in first, and then two fast units.
3) Armies are crazy powerful, and the AI doesn't know how to fight against them. The combat system simply doesn't work when there are units that are more then three times more powerful than all other units running around. The AI is afraid to sacrifice units to kill them, so you get situations where an army of knights can run around an AI's territory in the industrial age without being attacked.
My solution is similar to Jaybe's, which he posted near the top of the thread. Armies can never load more than one unit. This solves problems 2 and 3. Give all civs an ancient age small wonder that auto-produces armies every 30 turns or so. This fixes problem 1. You can fiddle with the military academy, pentagon, and shield cost of armies too.
Armies are still useful. They get a move bonus, blitz, radar, a small stat boost, and free pillage, plus any hp bonus you give to armies. It's like a regular unit with a really great leader, rather than a super-unit that can't be killed until tech advances 1000 years. Another nice side effect is that using MGLs for small wonders or even improvements instead of armies isn't a total waste. Even weakening armes this much, they're still fun to use and fight against, but they don't single-handedly win wars.