Well, I'm not a very big fan of KKII either, but at least it's better than no castle at all, and hopefully it will sell in such an amount that TLC decides to produce more (castle-themes that is).
The degeneration could be worse, I mean look at the new piratesets...
Let's see the posibilyties (if that's how to spell the bloody word) if not, please tell me before I get the dictionary...
As for army-building, I dont think that's possible if you do'nt have a lot of $$ (or swedish crowns for that matter) that is to say, ypu will not a very big army out of this sets, even if you buy them all. So maybe border encounter is the way to go, as you so wisley speek. But then if you dont want an army but a gallery of characters that you could maybe build an story arround, I think these guys are good, of course you have to mix their body-parts with the old Lego-people you have but then they might be of use...
I do'nt know if these sets are very good to begin your castle building career with, but we'll see about that.
laying seige on a castle that big with just four guys and one piece of artilery, it smells like Fischer-Price!
-kajo-