Originally posted by Vrylakas
Hitler did a million things that undermined the Nazi and German war effort.
... and thank God for that...
As you said, Vrylakas, Hitler and the Nazis were the main problems for the Germans.
First of all, the Germans could have, as you said, treated the civilian humanely. There's no doubt that the hundreds of thousands of Russian partisans behind German lines would have had a much harder time, had it not been for the brutal oppression by the Germans.
Secondly, the military could have be prioritised differently. The SS was prioritised, and in reality, this and the Nazi bureaucracy was a great inhibition to the Wehrmacht. The best material was sent to SS units that often were less organised and less trained (although this wasn't usually so) troups, instead of being the intended elite of "Aryans". All the resources which were poured into the SS and different militant and paramilitary branches of the Nazi leadeship could have been well spent on the Wehrmacht.
The Blitzkrieg doctrine was ignored in many of the later invasions, as well as Bismarck's warning agains a war on two fronts against both Britain and Russia. This was partly the result of arrogance, and hubris. The Germans meant that since they had won the wars against Poland, Denmark, Norway, Benelux, and France - Germany could take on the rest of the world. They failed to face the fact that most German equipment was out of date by late 1941.
On the grand strategic level, some particular things could have been done (although I don't claim this is a complete list

):
1) After the defeat of France, something should have been done about the problem of the UK. Some kind of peace settlement would be vital. If that wasn't possible, the entire German industry would have to be focused on taking Britain out. The fact that Germany wasn't fully mobilised until 1942 contributed to the defeat in the Battle of Britain. Any action in the East would be unacceptable without peace on the Western Front. A subdued England would easily rise again and become a serious threat with American backing (as happened in the war).
2) Under no circumstances should Hitler have declared war on the US. The US would probably have intervened against Germany anyway, but there was no reason to provoke the worst-case scenario.
3) Had England been defeated by the Summer of 1941 the Germans should have taken out Yugoslavia and Greece and waited with Barbarossa till the Spring of 1942 - Stalin would have continued his purges in the military, and he would obviously not have seen it coming. Soviet Russia would have been more prepared by 1942, the Wehrmacht would have been mobilised fully, and there would have been more Summer months for it to strike. Depending on the success of the invasion, the Brest-Litovsk settlement 1918 should have been re-proposed - Stalin contemplated proposing it when the Germans had destroyed the Kiev pocket. If Moscow had been taken as well as Stalingrad, Leningrad, and the Caucasus, more favourable terms could have been achieved. But most importantly, the war would have to end before the end of the first year. The Russian self-confidence should not have been allowed to rise as well as the industrial production - a quick but limited victory would be better than a longer-lasting war with a potentially larger victory.
4) The peripheral operations should have been kept going. Rommel's corps should have been reinforced as well as the submarine fleet in the Atlantic. It would delay any significant Allied action against mainland Europe for longer time - perhaps time enough to end the war in the East.
5) Hitler should have focused less power around himself, and allowed the officers to run the wars. The Blitzkrieg Doctrine should have been kept in mind in the East: Surprise, limited objectives, concentration of over-whelming force, superior mobility and flexibility, avoiding concentrations of enemy forces, encircling them rather than confronting them, seeking to fulfil military objectives rather than political and economical. If all those things had been remembered before Barbarossa, Fall Blau, and Zitadelle tings would have looked much different.
But there are so many other factors... too many...
BTW, there were more than a hundred thousand Russian Hiwis ('Hilfswillige', 'willing to help') in the German ranks by 1942. The Sixth Army alone depended on more than 70,000 (est.) of them. The number grew significantly later on in the war.