Dan-
Because of the great increase in corruption, especially as distance from your Capitol and/or Forbidden Palace goes up, I have noticed a trend in my own gameplay, and somewhat it seems in SOME civs, to crowd cities in, especially around the Cap/FP. The desire to construct a border, seal out the AI from favorable city sites, and to remove open (not in your borders) tiles for "invading" AI settlers also seemed to push in that direction. The result is I very quickly have a larger number of cities then my former play in Civ II (I am afraid I must confess that I was a very "straight forward" civ player, and never even tried the ICS approach- it never occured to me to NOT try to maximize my city placement and strength- I didn't even know about the approach before reading about it on these forums. Call me naive.)
Perhaps SLIGHTLY toning down the AI "land grabbing" nature (I stress slightly because having a pushy AI overall is good), but better yet, modifing how corruption works from a distance perspective could help on this. Distance from Cap/FP SHOULD REMAIN part of the equation, but tone it down to about a third or a quarter. Boost it for other reasons to compensate a bit so that overall corruption drops somewhat, but remains an important hurdle for the player (AND AI!). It would seem to me that the factor to use here is city size. As (city size) population grows, corruption in that city increases ... everywhere in the empire, somwhat more further away for Cap/FP. OTOH, to prevent an ICS, let corruption incrase in SMALL cities that STAY small over long time periods (ie where growth doesn't happpen). This way, we simultate the greater corruption of the big city ... AND of the samll town sherriff in league with the "good old boys" running the village. By weakening the land grab aspects, and the distance aspect of corruption, there is less penalty to spreading cities out, hence fewer cities worldwide. And there is a reward for paying attention to and developing better quality cities, and not just plopping them down to block the AI (which I find myself doing a destressing amount of the time- paritculary to protect the roads through the desert or mountains, going that long way to the one source of iron or whatever, that I have).
To me, one of the most simply frustating and irritating aspect of CIv III is that trying to establish "outpost" of my civ (ie nets of cities) on other continents is so futile, in that the cities are almost all 1shield 1 gold producers. Yes, you can establish a FP, but only one. Perhaps a smaller cost and radii of effect for the FP, but let us build more- how about make the court house improvement do it, more expensive, but a "mini-FP" in effect. This way we could at least have some reward from expanding to other continents. It would have to be carefully balanced not to become to powerful of course. OR allow more, but a limited total number, of FP throughout your empire.
Just some thoughts. I just hate a continent full of 1 shield 1 gold producing, effectively, cities. And to prevent the AI from landgrabbing, it seems like I build a large number of them on "overseas" continents.