It also instantly turns jungle into forest. Which is huge! You can productively colonise the jungles before any other faction.
(It is funny seeing the equatorial regions on the map going to the ice-faction, who immediately turn the tropical rainforests into boreal forests).
I think that the balance is quite interesting. On average, they have slightly weaker terrain than anyone else, because they lose the commerce bonus from rivers, and have more difficulty getting hammers. Though they get a small combat bonus.
But! They get this medium terrain quality everywhere, no matter how bad the base terrain is. There really is no really bad city placement for Illians, as long as there are a couple of hill tiles. While this isn't such a big deal on map scripts with really nice terrain, its great on maps with big swathes of desert and jungle.
A question that I haven't investigated yet; does the ice ever go away if you lose the city or are invaded by the AI? Or is scorch/vitalise the only way to ever turn the ice back to terrain productive for other factions?
I think I am also correct that ice is unaffected by the armageddon counter, so the Illians are an evil faction that are unaffected by the spread of hell (and have a quick counter for it, just whip out a temple of the Hand).