We all know these forums need some more spice, so here it is: Master of Magic is good, but not great. There, I said it.
- This is (obviously) just my opinion.
- I'm not trying to start a flame fest, so let's not get out the gasoline, ok?
- There are facts about the game, such as mechanics and units.
- There are opinions about the game, which are not to be stated (or interpreted) as facts.
- Opinions should be supported as much as possible, but--since they are not facts--do not have to be supported.
- Don't talk about FE unless it's to contrast facts between the two (i.e. in FE (or AoW) they did X, MoM is Y, Y is better/worse because...).
- MoM of course gets major credit for being the first to do its thing. Please differentiate "XYZ was great when MoM did it" from "XYZ in MoM is still better than anything else we've seen."
Why start the discussion?  Fun.  It has a major effect on how people perceive FE, and other games in this genre.
So, without further ado, here is my opinion on MoM, in very general terms:
The system that MoM set up was great: cities, troops, heroes, spells, items, etc. Building the next level X to get the better unit was fun. Finding the great hero was fun. Creating that sword you really need was particularly awesome IMHO. In addition, I found that the subsystems all worked together very well.
Furthermore, the variety was also great. You certainly could play differently with different spellbooks and races and whatnot.
The lore and feel of the game, such as it was, was also pretty good, but I hold that it benefited from the grainy little graphics (that were, of course, the only option at the time). Hear me out: the races were pretty standard fantasy/D&D fare, and the icons were just enough that you could tell what things were and they were suggestive of what they represented. The paladins, for example, were essentially a colored stick figure on a horse, and since every nerd worth her salt knows what a paladin is, we all had a picture in our heads of grand knights in shining armor. The graphics as a whole were very colorful and did well to enhance this. This also allowed the setting to be standard fantasy, as it invited the player to fill it in with imagination. (I would argue the same is true for Dwarf Fortress, but that's a tangent.)
The above all make MoM a good game, but the reason it is not a great game, (again, IMHO) is simple: the AI. I don't remember what difficulty I played it on, but the difficulty of the game (to me) was overcoming tough monsters, not the AI. Sometimes those monsters would be wandering/lair protecting, sometimes they would be controlled by a rival, but the AI never used the excellent system the game had to make a fun game. The AI could build stag beetles and throw them at me, but once I figured out how to defeat a stag beetle that was it.
Now I'm not saying I could have done better; I think that the wonderful complexity of the whole system (cities + heroes + spells + items + troops + summons) doomed the AI from the get-go. But for me, once I had explored the system to its fullest, there was nothing left to do. So I put the game down, disappointed that I couldn't test out the best hero + summon or troop + spell or strategic spell + tactical mischief that I could come up with on a deserving opponent.
To fix it, you could either:  simplify, streamline, or dumb down the system;  add, and then play, multiplayer; or  invest heavily in making the AI better. Personally, of course, I am not in a position to do any of them. (Fun question: is the source code out there? If so, is it even worth looking at?)
For a modern game to be successful in the same vein, it's going to have to be very careful with the lore/graphics issue (assuming, of course, it can get the underlying system right). Perhaps using sprites is palatable to a modern audience, perhaps not. Are people tired of the same old fantasy setting? I'd wager not, but I could be wrong. Multiplayer is, of course, possible, but not my preferred solution. The trick of making a system complex enough to be fascinating and replayable (over and over again) yet still manageable by an AI is certainly a difficult one.
So, to summarize: Master of Magic is a good game because it has an excellent underlying system and just the right setting and graphics to capture the imagination. For me, it is not a great game because once I explored it, I had no reason to go back.
OK: now everyone jump in and disagree! It's just, like, my opinion, man.