I've always have a militiristic/expansionist bent in Civ2 and still want to play that way in Civ3. Obviously the new corruption system in place is designed to make conquest much harder by making your newly aquired cities next to useless.
Obviously, the Forbidden Palace is a must. Whether you build it and move your Palace isn't a big deal, just make sure the two are spread apart. You'll have an "8" shaped or barbell shaped empire with the Palaces in the center. FP in capitol of vanquished Civ is a good spot. With this you can support well over 30 cities without corruption being a huge headache.
For a domination victory where your FP is already placed, you'll just have to live with the fact that the cities you capture will be useless. You can raze them if you like, but I find that any razed city leaves open space, and that space will be gobbled up by a rival Civ in an instant, so you might as well just keep it.
What to do? This isn't a solution as much as an adjustment. I've found with corruption so high after X cities, X distance from capitol no matter what you do, it's really important that your core empire produces optimally. In Civ2 in any one city I rarely had every city improvement built and every tile with maxed improvements since I concentrated so much on conquering and expansion and could get away with it. No more. You have to have every core, non-corrupt city with a Factory, Coal Plant, etc everything to maximize production. Every hill and mountain mined, with some mines in grassland/plains. In Civ2 I rarely had any one city give me 50 shields a turn since I could count on every conquered city giving me incrementally more production power. In Civ3, thanks to corruption robbing outlying cities, I build up my core to the max and have most of my core cities cranking out +50 shields, with some approaching 100. Tanks every two turns in these cities if I need them. I'm still able to crank out the units I need even if several of my outlying cities do squat.
Another way to get the one shield cities going is a technique someone on the Apolyton site calls IFE, or Infinite Forest Exploitation. Perhaps a bit of a cheat the designers never intended, but the idea is to take a hoard of workers and have them just plant forest->chop forest->plant forest->chop forest, endlessly to get those 10 shields per chopped forest in the corruption plagued cities. This is only worthwhile, IMHO, if your workers have already maxed out improvements and are just on pollution patrol late in the game.
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