I routinely use armies with a fair degree of success. Load up an army with 3 tanks and crack open that tough 15 pop city defended by Infantrymen. It works. Armies composed of tanks can also attack twice in one turn, another plus. Later create an army of MA and go hog wild on the AI.
The advantage of using a couple of armies to take a 12+ size town is that you don't have to bombard irrigated tiles to knock the pop down so you can attack with a single unit successfully. You don't have to bombard the city to kill the pop and risk blasting valuable improvements.
The only thing armies can't do is pillage but that's a small price to pay for a unit that can bust big cities without a lot of collateral damage.
I'll show you guys when PTW comes out.
So you can't upgrade an army eh? This might be a problem if you have an army of swordsmen when you have the tech for say rilfemen, however it's not so bad not being able to upgrade an army of tanks. Besides, at that point in the game your production power should be so great that you could disband the unwanted army and create a new one of MA in a relatively short period of time.