What you might want to do is have the desert good yeilds for the Fremen. This will encourage desert cities. Later on in the mod, when you are looking at desert cities, I would recomend looking at Gordon Farrells Ledgens of Ancient Arabia mod. It is really good.
Will look at that mod, if they have something excelent, why reinvent the wheel.
What I had planned on doing, concerning desert and desert cities, is Neither basin nor desert tiles wil produce water (replacement for food yeild) Windtraps built on any tile will give +1 water yield, water seal buildings will add +1 water to city tile and cistern buildings brings 20% of water over each growth. Growth would of course be limited, which is ok as this is not only a civ building mod but a desert survival mod of sorts.
The Fremen would get Deathstills and the Fremen Stillsuits as the their extra bonus to this survival aspect of the game. Basin tiles will produce 2 gold yield and 1 production, where hills wil produce 2 production. Desert yields nothing and acts as jungles with +1 sickness. Fremen are immune to the desert sickness, didn't think to add this till now based on your suggestion.
The incentive for the desert cities, as in the books, will be the spice. Though civs can stay in the basin and fly and get the spice, the distance, inferiior stillsuits, and maintenance for having to build Ornithopters to transport workers to spice locations is vast incentive to get the the spice resource that only grows in the desert. Thus encouraging expansion into the desert where the fremen get the natural advantage of location, being the only civ that starts in the desert.
Why would someone want spice? Well the spice acts like gold, that is accumilated. The more spice one hoards, the more gold one produces, the more production one produces, and the more water one produces (to a lesser extent than gold and production). Spice is life and one can trade it for gold and water and produce lots of stuff from it, to include clothing and liqour. There will also be events based on the amount of spice one gains. Once one gets a certain amount of spice, they get a CHOAM Directorship. More on that later, but to balance Fremen's natrual headstart and to keep with cannon, Fremen can not get this Driectorship.
Of course if this turns out to be overly complicated it will definetly need to be reworked. But I think alot of the complexity will be behind the scenes. And the Balanceing of it all will determine if all tis will be kept or some of it taken away.
So what do you think?