The more I think about yesterday's Warlord discussion, the more I realize that the circumstances of this gaming group are very likely skewing my impressions of the game. Our group is nearly double the size of the "standard" D&D party. We are also, as mentioned yesterday, pretty damned hardcore when it comes to tactics. In a smaller group, the Warlord is going to have much more opportunity to bestow extra attacks and help his allies cover ground. In a less-tactically minded group, the Warlord provides a handy second chance to set up optimal positioning. In our group, he was basically an Initiative bonus.
I still think the wide-open nature of Initiative makes the Warlord less effective, but I'm not sure what I'd offer as a suggested fix.