I agree with all the absolute powers of the King except for troop recruitement. I think the only way the King can interfere with this is to grant a player a provincial title against a certain requirement, which will have to do with the province granted. For example, if Tuscany is granted, its owner should be expected to have ready for the King two units of Urban Militia and perhaps a unit of some other auxiliary troops (it is a rich province). If Scotland is granted, than let's say two units of Highland Clansmen. The size of the requirement should be based on the income of the province - you cannot expect the Amir of Sinai to be able to produce and keep 3 units of Mameluk Horse Archers for example. To keep it realistic (and difficult), the King would only be able to gather a small army of specified units from his kingdom to join with his troops - he will have a complete liberty to produce whatever he wants in his capital province in addition to his unit of RKs. I guess the province troop requirements will have to be revised every once in a while to reflect technical progress.
If an urgent need for more troops arises, such as a Crusade, the King should be able to issue a special decree, requesting the troops he deems needed. If the King allocates the amount of florints necessary for training the troops, and then pays for their upkeep (not a big problem in the case of a Crusade), then this order should be followed or the King will have the right to strip the player's hero from his titles. If the King decides that it is up to the player to cover all training and upkeep expenses of the desired troops, then in order to be able to enforce it, such a decree would be put to vote and needs to be supported by two thirds of the voters.

Now I was thinking that a player may have multiple heroes, so that he can own multiple provinces. This will also allow the green generals command to be used. In reality, great commanders such as Nur al Din did not live for centuries so that they could later face the Mongols and finally conquer the Scandinavian Peninsula. It is true that it will be disappointing to lose a great general, but it would be nice to be able to get rid of that hero that just developped unhinged loon, secret perversion and gluttony in a realistic manner. Every player that gets a province will have the ability to eventually produce troops, and all these troops will be potential heroes, so if he starts with a 1 star, 3 acumen unit of urban militia, and later obtains a 3 star, 5 acumen feudal knights unit, then he would be able to transfer the provincial title to the better administrator and commander. This way an important thing is insured - players will be motivated to build troops as they would be looking to get a better hero, while otherwise they will only want their hero to marry a princess and to fight as many battles as possible (as this is pretty much the only way to develop them). Also, if an entire unit is lost during a battle (or a commander lost to an inquistor), players will not be out of the game, as they will have other heroes to resort to.

Finally, I agree it is probably a good diea to settle on a faction, so that we can agree on some rules, as what applies to the Danes may not necessarily apply to the Turks. I suggest we use the XL mod, simply because it offers the greatest variety of factions and troops and a GA campaign. I suggest we use a faction that has 3 or 4 starting provinces, so that a few of these can be distributed to players at the very start of the game. If we start with a one province faction, then there would not even be enough heroes. I took a look at what MTW PBMs have been done (although what we plan is quite different), and the following factions have never been done - the Italians and the Turks. I suggest we use the Genoese, because they have four starting provinces, allow for a slow paced game and have all the extras such as Crusades, the Pope and certain GA goals. The Venetians and the Turks have more interesting GA goals, but the Venetians start with only two provinces if I am not mistaken, and the Turks, once they conquer all of the Middle East from Constantinople to Egypt and establish a three province border become a bit too easy. So I personally prefer Genoa as it also fits nicely with the concept of players' voting on certain issues, but I would be happy with any faction that is not a generic, boring one such as France, HRE or England.