To re-cap the house rules:
1. there are restrictions on CSA invasions of northern free states east of the Mississippi/Missouri (CA, OR, KS are ok, as are the border states MO, KY, WV and MD). Otherwise the CSA can only invade once/year starting in 1862 for a period of two weeks, and then has to leave.
2. CSA can do limited mobilization starting in 1862, full in 1863 and thereafter, USA limited in 1863, then full mobilization in 1864 and thereafter.
3. No "militia raids" - lone infantry units cannot enter regions unless they are either militarily controlled 50% or greater or have 50% or greater population loyalty to their side. We discussed requiring a leader for any such penetration or permitting lone INF units with a leader to do this. I'm actually unclear as to whether this is permitted (Redeemer?) or under what circumstances.
I'm playing the CSA and Redeemer is playing the USA.
We've played the first year of the war. The USA has lots more manpower than the CSA. This has permitted some rapid advances by the USA, into the Shennandoah Valley and northern Virginia, and out of Fort Pickens into western Florida. The small Confederate forces have been running around wildly trying to stop Union penetrations. There is certainly nothing to spare for raids into the north even if the Confederates were allowed to. I get the feeling that Redeemer is a much better player than I am and this might have some impact on matters

I have the odd impression that I have all the WS and money I might need. This is something that other CSA players have mentioned on the forums. Up until this point I've usually played the Union and the 60 or so recruits you get each turn normally (if you put Banks and Burnside and McLernand and so on into the big cities) make a big difference. I've finally arrived at the point where I am allowed to draft, and it makes a real difference to my strategic planning. I have built a lot of rail and river shipping capacity but have made little investment in industrialization.
Combat seems realistic and losses haven't been extreme. There are few repeated battles. Campaigning in the winter is very difficult - on two occasions I have tried to attack Redeemer's Shennandoah Valley base from the south only to get my guys turned back for lack of supplies and organization. Redeemer's Yankees have been very aggressive, much more so than historically, taking advantage of my threadbare armies. But he has taken what seems to me to be lots of losses and maybe this is having an impact on his ability to keep up the pressure next year. Hopefully, anyway.
I used the option to pay bonuses for recruits twice. The money cost was high but I think worth it.
I have been buying a number of brigs and putting them into the blockade boxes. Redeemer has large forces in his blockade boxes and he has caught my runners on two occasions and chopped them up. I wonder if the amount of WS they bring in will make up for the cost of repairing them. Perhaps the WS would have been better spent on industrialization? Or just building more artillery?
I managed to create divisions pretty quickly, and don't seem to be under any restrictions at all at this point (I had thought that there was some limitation in the newest patch but obviously not). My armies have been much more efficient as a result. Very few of my forces are at -CP modifiers, while I get the impression that many USA forces are. The Yankee's are still hard to move, though. The one big battle in the eastern theater was at Fredricksburg, where I was unable to drive off an intrenched Yankee force that I outnumbered about 1.5:1, even though my general (Beauregard) was much better than his (Hamilton). But level-3 forts were enough to protect them. So now the Yankees are all the way down to the North Anna, as well as controlling much of the Shennandoah.
Redeemer did one interesting thing - he built a depot in southeastern West Virginia, allowing him to bring large forces across the Alleghanies. I don't know if this is a common move for the USA, I never considered it myself, but it has sure played hell with my defensive dispositions in Virginia.
Nobody has invaded Kentucky yet. My forces in Tennessee have done other things - running down to western Florida to fight off sorties from Fort Pickens, going across the Mississippi to defend the "toe" of Missouri, drinking beers and listening to country music in Nashville...and sometimes some Memphis blues...
Redeemer's Yankees overran Missouri depressingly easily. I lost five regiments of very scarce recruits in Jefferson City and Price's boys got run out of Springfield in short order. I get the impression that Redeemer made the Missouri campaign a priority. I managed to hold Fayetteville in a battle fought just before the weather closed in.
In the land of far, far away, Ben McCullough's boys have taken Tuscon. From my experiences with games against the AI, California is a hell of a long way away, but at least there won't be any Yankees coming into Texas from the west. Again, I wonder if the outcome was worth the resources invested - those troops could have been helping Price hold on to Missouri. The abortive Sam Houston Unionist uprising in Dallas was just too much to resist, though. As the Union, I have taken advantage of that event to conquer most of Texas against the usual riff-raff of Texas Rangers and militia that the AI usually uses to defend there. I couldn't resist the temptation to send some real troops out "west of Pecos."
So that's it - after all the discussion about what would happen with limits on CSA invasions and how it is no fun to play without them or the CSA would get crushed if it didn't have the option of marching on New York I decided to try it out and see what would happen. Now if only I could find somebody who understands the computer enough to mod the program to put this into an "official" mod. I think for the recruiting/drafting I prefer Clovis' (the SVF mod) ideas to doing it this way. Nobody has been able to suggest a mechanism whereby I could mod the program to hamper or punish southern invasions of the north.