Well, we've been talking about how to generate essence, how important it is to balance because it is so important, but we haven't really talked much about why it is so important.  Hence, my thread detailing how essence is used now, and various ways it could be used/executed.  This is meant to be a discussion!  Feel free to put your own two cents in, and correct me if my "now" isn't entirely accurate.  My initial "uses or modifications" is completely open to revision and addition.  I will include specific corrections with edits, both to identify consensus and update as people bring more to the table (if this thread takes off).

Now: 

1) Imbuing land:  5 Essence gets you a city, and a focal point for revitalized land to expand outward

2) Mana for your sovereign:  the total amount of essence equals the total mana that a player has access to in a turn

3) Spell use: expended for certain spells (right now, simply imbue land)

Potential uses or modifications:

1) Imbuing land: increase the fertility of the land or quality of the mine.  Quantities of essence expended will need to be balanced based on essence gain, but pretty much you can take the quality of a mine and double, or add one, to its production.  Or create a fertile piece of land on merely reclaimed land, or take fertile land and make it a wheat producing plot, or plains and create a horses resources on it, ect.

2) Infusing magical artifacts with power:  This could be extremely ill-defined in how powerful you make items.  Personally, I think that the key here is using a version of the spell editor, giving various magical items the ability to case spells in addition to enhancing attributes, altering the land, ect (what can everyone think up?) costs essence based on a pre-determined cost per ability/strength ratio.  This could be further specified into the ability to imbue certain powers largely into certain items.  Contact attack spells could be imbued more easily into magic swords, while protection spells could be placed into magic shields or armor.  A lighting spell could be imbued into a bow, striking wherever any arrow hits from that bow with a bolt of lightning.  Dominions 3 had a pretty good variety of magical items that did a lot of different things from protection, to regeneration, to extra damage of various kinds to altering the person it was on or province it was in.

Types of Magical items:

Swords, axes, maces, other melee weapons:  infused with superior attack quality and contact spells, enacted when the wielder uses the weapon on someone/something

Shields, armor and helmets:  infused with superior defense quality, protective and regenerative spells, as well as spells that influence your surrounding terrain or cause illusions

bow's, crossbows, throwing weapons:  infused with greater attack, and distance spells that the user doesn't want anywhere near them

Rings and misc items:  world altering spells and effects

3) Infusing people with magical power:  This could be a slight changeup in the magic system (that would naturally need to be contingent upon essence acquisition being altered slightly through differently acquired experience or an essence gain separate from experience), that instead of your mana=essence on hand you expend essence to increase your, or a champions, mana cap (say, 1 essence gets you 2 higher mana cap).

4) Creature creation:  Currently under discussion in another thread, infusing captive creatures to give them special abilities, higher stats, greater growth rates, ect.

5) Massive spells:  The equivelent power-wise of a nuclear blast I see four types of this.  

First, a massively destructive, localized one time event (like a nuclear blast or the famous volcano) which is sufficient to destroy a sizeable city or sink a continent. A single time use of essence, the more essence you put into it the more destructive the spell (greater radius/intensity). 

Second, a massive, global one time distructive spell.  An example of this would be calling in a solar flare, which would severely damage most of the map, causing most of it to revert back to unrevived land (causing massive famine and unrest in its wake, as the land you are using for farming stops yielding food until it spreads out from the few remaining spots of non-devastated land).

Third, a global spell that is continually distructive, requiring continual infusions of essence.  The amount of essence put into the spell per turn determines the strength of the spell.  Some examples of this are "the dead rise," where every turn throughout the world a certain percentage of the population dies and is resurrected as undead friendly to the channeller who case the spell, or to steal from Dominions 3: Utterdark, where the entire world is cast into darkness, unrest increases every turn while productivity and taxes plunge throughout the world.

Fourth, global protections.  The size and strength of this spell should be determined by the amount of essence put into it, and it could either stop, or only partially mitigate, other channelers spells.  That being said these should be permanent unless dispelled.

Dispelling:  essence to remove global enchantments that are there from turn to turn.  Should cost less than the spell trying to dispel, but also have a chance of failure, and should take a couple of turns to cast.

Anyways, just some suggestions to get the ball rolling.