I've been playing the game since yesterday, and I must say that the beta is already much better than E:WoM. However, there are still several issues that I feel need fixing or improving.

First of all, the factions are still disappointingly similar. Aside from the Empire/Kingdom division, the customization is almost non-existant.  Picking a few traits out of several (most of which are "you start with one technology") is far from interesting. Look at Master of Magic. Their civilizations were horribly imbalanced (like, say, klackon vs. halflings) - which took only some editing to fix - but their gameplay was different. For example, gnolls and lizardmen were early game powerhouses, due to stat bonuses to spearmen/swordsmen and easy to build higher-level units (wolf riders), but lacked in the long-run, by being unable to build more sophisticated buildings. In Elemental, each faction plays roughly the same, the only difference is picking +strength over +dexterity or +research.

Of course, I'm not saying that every faction should have its own tech tree. But being able to customize more is a start.Some ideas:

• each one could have focus on different technologies (some get bonuses to adventuring, but lack specialization in normal warfare - maybe can't even get the best technologies in that tree)

• stats for their "basic villager" (who would serve as a basis for most of their units) could be modified (sturdier but more clumsy, glass cannons, etc.)
• affinities for diffent magic schools
• passive abilities to buy (water-walking, fire-breathing or simply resistance to water magic)
• picking what high-end units to be able to build or summon (with some weaker but easier to create and some OP but available only very late)
• different values for production, food, growth, research and/or mana

Tactical battles are still not too interesting. There are several threads on this, so I won't elaborate. A couple of ideas (some that were posted earlier):

1. battlegrounds should be (much) bigger. Right now, cavalry units are able to reach an opponent in one turn! This should never happen, unless there's a unit with teleportation ability. It's especially important in larger battles. Make it so that foot units have to take at least several turns to reach a standing foe (maybe by cutting their movement to 1). This way, the battles are more tactical and don't evolve into a scrum, shooting units are more useful, positioning is more important and there's more time to use special abilities.
2. more special abilities, from passive like poison, breathing, armor-piercing, thrown attacks before melee, to active - defensive stand (increased defence for a turn or two), arrows that slow down, stunning, attacks that push opponents away. That's the easiest way to make battles more interesting.
3. (1) might get archers pretty overpowered, to balance it out, they should be unable to shoot into melee (or they could, but with danger of hitting their own)
4. attacks of opportunity (mentioned earlier)
5. tile bonuses/minuses (mentioned earlier)
6. special tiles (mentioned earlier)
7. some kind of cap on how much mana can be spent in a single battle, probably influenced by techs or sovereign
8. flanking (mentioned earlier)

minor stuff:

• more XP needed to reach higher levels
• basic caches should not have good artifacts inside (or at least they should be very rare)
• SCROLLING!!! arrows keys or at least by moving mouse to the edge of the screen
• more aggressive roaming creatures and AI
• heroes should get injuries after falling in a won battle, with a chance of being killed outright. the disadvantages should also be bigger (what is -1HP for a 10th level fighter? -10% HP, well, that's more like it)

edit: oh, that should probably go into FE BETA subforum, but I wouldn't have thought the subs are down below.