My own feedback on a few issues:
Encumbrance of lighter armors: With games that go by small dice rolls (this is essentially a 2D6 mechanic game, right?), there is always a problem with granularity. I always personally loved the broad possibility curve of D100 pen-n-paper RPGs like Rolemaster. That said, sometimes you have to lose a bit of thematicity to the lack of granularity. I think, unless the armor is extremely light, keeping the encumbrance of it above 0 (i.e., 1) is a must; 0 is "perfection," at least in a sense.
My own approach is to respect the difference in small numbers, whether in a low-granularity game or a high-granularity one. A simple increase of 1 in protection (or damage, or precision, or what have you) for a category or item above its equivalents/commensurates is a respectable advantage; 2 is incredible and rare, and 3 is legendary/fantastic. As long as flavor text/thematic element is reflected in some numerical manifestation, I think the it maintains both feel and real advantage. The special nature of the Mongols is going to come through and shine even with more modest numbers.
General Power Curve: I agree on balancing it more and not making it an early power/late ragdoll nation. If you want to go with MR hit, I would make it no less than 9.
Commanders and Randoms: Aw, I love the selection of commanders. Perhaps in the intense economizing of MP games the top three might be the only ones chosen, but, at least in an SP game, I see myself loving the variety.
And on randoms, perhaps a slight bit more predictability may or may not be in order, but I like the theme and random element keeps it fresh and interesting.
Regular units with spy and assassin tags: Seconded on removing the tags. While it makes for more fun with GoR, I find that excessive.
Bows: What rdonj said seems pretty persuasive to me as well. The Semitic giants here are the mechanical representation of actual giants, not just large men with well-constructed/designed bows. And those giants with well-constructed/designed bows! It seems that the limitations of the game in its current state force you to choose between (1) trying to find some way of making them distinctive and special with vanilla Long Bows; (2) making them definitively special with custom bows, at the cost of making your nation (or at least those heavily-used archers) egregiously miss out on the most important spell to an archer-heavy nation; or (3) use bows meant to represent what 1,200-pound giant archers with well-designed/constructed bows use. At least to me, (2) seems fairly unacceptable (from a designer standpoint -- if you did it anyway, I'd still play it
); flaming arrow compatibility is essential, and (3) cheapens giants and is just too broad.
I dunno -- very hard choice. But also remember that the devs represented inhumanly-strong size-3 Japanese dai bakemono archers using Japan's bows as Long Bows as well. In the end, if you went with Long Bows and gave them a nice precision bonus, I think they'd still be very special. Horse archers with bucklers and long bows sound very scary indeed.
Sprites: Oh, by the way, do you have an overall color scheme in mind? Tans and reds, for example, or something as a guide?
And, if you have specific requests and ideas, let me know, and I'll try to put something together.