Campaign Setting Concept: Religious Conflict

Don raised an interesting idea in an earlier blog post comment, and it lead me to think about religion more in my campaign setting. I've always run a more sandboxy style of play as DM (see The Grumblin Grognard's "Sandbox vs. Adventure Paths" posts). That said, setting up a larger background's religious conflict might be very cool. I'm not talking about the St. Cuthbert vs. Lolth variety, I'm talking about the conflict between deities or whole pantheons where language, history, and culture comes into play, regardless of alignment differences. Has this been played up or examined in any Greyhawk (or newer) campaign setting?

I'm envisioning a much more subtle and challenging set of moral dilemmas for players and characters to confront. What of the zealous, self-righteous religion, bent on evangelism but not necessarily evil unto itself? Or does the the very nature of an expansionist, evangelistic religion in the game automatically define itself as "evil" in some sense, given the polytheistically open, or at least objective nature of the rules system itself?

My ideal campaign setting would in many ways mirror the current social/political/spiritual reality, yet would retain a very fantasy and medieval feel: the concentration of magic power geographically being analagous to our present energy situation, the cultural battle between progressive and fundamentalist visions, and the conflict and confusion of a new and compelling pantheon of Gods or beliefs in juxtaposition with the traditional ways and faiths. Combining these elements as campaign building blocks might be very fun to explore, especially if I can get the actual geographics of it right.