Religious topic are always too emotionally charged. I don't think it's a good idea to say that any religion is bad in any way, in a game or otherwise. I think that all major religions in the world are inherently good.
Here's my idea of how religion could be implemented in the game:
1) give players a reason to change their civ's religion: I'm thinking giving civs of same religion better relations, trade discount, trade more often (between AI's), cheaper alliances.
2) have penalty for changing religion: temple and cathedrals lose their accumulated culture upon changing religion.
3) give each religion their little flavor, positives only

. For example: Christian + representitive government = a slight research bonus, Buddhist civ can build the Monk unit, which pacifies citizens (MP that works under all government types), etc.
So basically, religion is like government that a civ can switch to. Some religions become available at polytheism, some become available at monotheism, some even later (atheism? scientology?). It should become another strategic decision that the player can make to affect the game, but it's effects shouldn't be so powerful that it is unbalancing in anyway.