I agree with most of your review, Smash, with one notable exception.
Yes, the director's agnostic take on The Iliad was conspicuously void of any tangible presence of the Olympians.
If one might compare the story of The Iliad to a game of chess, the mortals would be the chess pieces, and the Olympians would be the people manipulating them. The director chose to focus on the chess board. I'm glad he did.
With the exception of the above, however, I thought the screenplay stayed relatively true to Homer's version, or rather, more true than is typical of novel-screen transitions. That may sound like a contradiction, and I suppose that in a sense, it is.
The movie would have grown entirely too fragmented and awkward if the director had chosen to include the multitude of gods and goddesses who were notably absent.
Sure, the director employed a liberal amount of artistic license by neglecting to explain the origin of Achilles' fighting prowess, and thus, his one weakness, but was that really necessary? Some, you for instance, believe it is. I don't.
I feel that if he'd included the backstory for Achilles' heel, he would have felt obligated to expound on dozens, if not hundreds of other instances in which the Olympians intervened; starting with an explanation of how Hera's, Athena's, and Aphrodite's vanity was the real cause of the war, and ending with Aphrodite guiding Paris' spear (or a bow, depending on the translation) into Achilles' heel. I think that would have made the movie unwieldy.
A couple other less notable differences of opinion:
Although it's been many years since I read Homer's epic poem, I don't recall Odysseus playing a large part in the story. In fact, I left the theatre with precisely the opposite impression you did; I thought that big 'O' was given too much screentime. One of our memories is obviously lacking, and it is just as likely that it is my own that is falling short. However, it's my suspicion that you are confusing Odysseus' prevalence in The Odyssey with his scarcity in The Iliad. I certainly wouldn't bet the mortgage on that though- assuming I had one.
Also, I thought that the actors did a decent job of portraying their Greek counterparts. Orlando Bloom made the perfect Paris; a wuss, a coward, and a philanderer. Mr. Pitt's portrayal of Achilles' was spot on. Achilles' was vain, egotistical, selfish, foul-tempered, and violent. Odysseus was clever, shrewd, conniving, and charming. Etc.
I hope my rambling here isn't seen as an attempt to defend the quality of the movie, because it really wasn't very good. Although I wouldn't rank it amongst a movie like Ice Pirates. I'd say it was comparable in almost every way with Gladiator, except in the department of originality.
I enjoyed it, though I recognize the fact it was sorely lacking in many ways.