I agree that looting of the bodies should be allowed. This kind of ties in with units that require several different resources, and having one of those resources removed. The best idea from THAT is to have whichever equipment slot it is to be replaced by the second best equipment (if equipment are more speciallized and less, this one good-this one bad, then human player could que a rank of 3 alternate equipment, or simply list their top 5 favorite equipment for each slot, in order)
either way, this style of thinking at least should lead development away from equipment glued to the unit.
for instance, if an army of bastard swordsmen defeats Longswordsmen, and the player with the bastard swordsmen decides he would rather equip longswords, then they can switch weapons no problem, since they are both swords.
Also, the number of enemies should be considered when looting, and if you select "take all swords" those beyond your army size would automatically be sold, and if your army was bigger, the swords would go to the highest level troops/ those with the most Hit points left.
aka, if you were 40 and they were 60, you would sell 20 longswords,
if you were 80 and they were 60, your 60 best soldiers would equip longswords.
I think a pop-up should only be shown for superior or alternate weaponry, while obviously lesser equipment is automatically sold off.
If however those bastard swordsmen killed an archer brigade with +5 bows, since these are powerful items, a pop-up would show, for "sell off" or "send to armory." Either a supply wagon would generate on-site to bring the bows back to a friendly city, or the bows would automatically teleport to a friendly armory, where they sit in a ware-house until you train units that can use bows, and then "select bow +5" will work with new bow units until all bows are sold. Alternatively, an army of veteran archers (friendly) can arrive at the city and equip said bows. If they are an ally (especially a human one) you can haggle as to the price of the bows, and what they are willing to give in return, wether it is a temporary lease of a resource, a technology, or some newly trained auxiliary units.
which brings me to another point. I think unit gifting should be enabled. Further more, I think a human player should be able to board an ally's ship. I see little need to allow the AI to do this, although coordinated attacks with human teams (one human's navy, the other human's army) should be allowed.
also, how are we going to regulate city creation and possible destruction? can a town be destroyed? how close together will they be able to exist? will their be distance costs?
I ask because I was thinking of settlers from civ 4, and the ability to "raze" cities. In a game such as elemental, I think it would be prudent for at least a ruins to remain if someone chooses to abandon a city, and monsters should most likely decide to preside theirin, like spiders, cave trolls, and goblins.