My opinions are two part in regards to changes.
Dex penalties should be proportional, not linear, and maybe more categories of encumbrance. Over half of max encumbrance should reduce basic move to 1. This would be a separate penalty. That said, chainmail/platemail on the battlefield should require heavy weapons or magic to do any sort of real damage.
Horses and Wargs move bonus should be impacted by encumbrance as well, over half encumbrance should reduce basic move to 2.
As for Champions: I think these changes would be nice.
Path of the Assassin (that I would rename Path of the Rogue). It's considered an underpowered school. What I would do is buff its abilities, but have the abilities reduce encumbrance. Master Scout might be a -20% to encumbrance, Graceful might be a -10%. That said, it would gain some nice promotions.
Encumbrance levels decrease spell mastery and increase tactical mana costs.
Backpacks should be a proportional reduction to encumbrance, like 25 or 50%. That's it.
Path of the Defender would get a skill to increase encumbrance limits.
New high level Earth spell: would allow halving the weight of an item for 250 mana.
Path of the Warrior would be unaffected.
Path of the Governor would be unaffected by this (needs other buffs)
One last semi-related idea: Starting at level 5, you would have a 1% shot of getting each of the path promotions to pop up.
Also, I'd like to see class promotions pop up, where if you met certain prerequisites (like owning a shard, or having certain stats), you can promote your "path" to a "class", which would open up new promotions (and lock you out of other class ones). They'd be more powerful then the current path, but you'd miss out on the promotions from the path that you don't have.