The size of the units increases with the distance.. so I believe the Gameplay is better because it's more easy to detect them.
I am trying to get a feel for this game, so forgive me if I ask questions that have already been covered.
I have looked at the screen shots in this thread, and I can indeed see that the soldier models do appear to get very large as you zoom out... also there seems to be fewer of them.
The problem I have with this system is that you lose the sense of the formation the units are in... I would personally prefer to either have the soldier models maintain their scale throughout, or else replace them with a bounding box (similar to the box that encompasses each unit in the 2D view) that will still help the player visualize the field, in fact it would be more clear in my opinion.
Also, after watching the avi's, and I mean no disrespect, but the motion leaves much to be desired. I don't know what 3D program you are using but if I were you I would look into CAT
http://www.charanitech.com/home.asp .. it is an excellent program that simplifies character animation and makes it more realistic than what you have at the same time. And it plugs in to 3DS MAX, so it is very easy to use.
Looking forward to watching this game develop.
Regards,
Bil