Having mundane research be a huge part of what makes up your power is fine in sci-fi, but in fantasy it arguably undermines the fantasy feel and definately undermines the relative importance of the channeler/spellcasting.
I couldn't disagree more. Fantasy is not all about magic. For example, magic doesn't directly play a huge role in most of Lord of the Rings. The solutions to their problems are hardly ever magical, and when magic is used it's mostly subtle. Likewise, George R.R. Martin's A Song of Ice and Fire series hardly involves magic at all, but nonetheless it belongs more in the fantasy genre than in historical fiction. As long as the technologies (or crafts, or whatever you want to call them) are suitable to a fantasy world then I think it'll only add to the fantasy feel. It also makes sense in the context of the backstory - Elemental is a world whose civilizations were utterly destroyed, and only now are the survivors starting to rebuild.
I also don't see how it undermines the importance of the channeler or of spellcasting, unless it's implemented really badly. Spellcasting and tech trees will serve different purposes, although I suspect that they will coincide at times, too. Moreover, we know that by the end of a game we will have access to massive world-altering, game debalancing spells. I don't think any technology will be on the same scope as magic. Likewise, many important actions will require the channeler, even settling new cities. It also looks like magical creatures will be more powerful than most/any of your mundane, technology-equipped soldiers. For example, we've already been told that individual dragons and powerful channelers will be able to wipe out thousands of soldiers all by themselves.
I just don't want to see "swordsman with shield" become wholly obsolete to "man with sword 5 and shield 8". I want "swordsman with shield" to still be a viable unit later on, though massively outclassed by "Unholy Bear Riding Fiery Claymore Wielding Doom Paladins".
I don't really agree with that, either. I think some soldiers should become more or less obsolete with time, at which point you should be able to release them back into your population or retrain/equip them to be more useful. For example, a peasant armed with nothing but a lousy cudgel should be no match for a well-armed, well-trained swordsman (If the clubmen greatly outnumber the swordsmen they should still be able to win, though).
Copper swords pretty much shatter when wielded against an iron or bronze sword, for example. Likewise a poorly constructed iron sword (either because of the shape or quality of the metal) will hold up terribly against a good one. My staple units of the beginning of the game should pretty much stink compared to my staple units towards the end of the game. Even to the point where their only practical use might be in maintaining order inside my cities. Or to overwhelm stronger units with vast numbers of crappy ones.