Hey everyone,
So v1.09 went live, and one of the big modding-side improvements is in the official addition of a 'my games/elemental/Mods' folder! The game will now properly read data from 'Mods/Data' and graphics and models from 'Mods/GFX'.
For anyone using Mods that have required data or graphics to be placed in the core game directories, I highly suggest moving these out into this new folder, otherwise Elemental may attempt to rebuild the Data.zip file, resulting in a nice, long pause when you first load it up....an nobody really likes 'nice, long pauses' when they're loading a game 
Speaking of mods, let me take this opportunity to point out the spectacular work being done in the https://forums.elementalgame.com/forum/756 community. The Elf Race and Undead mods are both looking amazing, several weapon and spell packs really add some sparkle to the game, theres even a Dr.Who mod that adds gunplay to the fold. You guys are nuts 
While bugs and core game improvements take top priority, we'll be dedicating as much time as possible to improving the Modding experience and getting the Tools/XML access you need to see your modding projects through. And, of course, thanks for your effort and support!
So, to recap... mods in main game folders = you may get a data.zip creation hang = sadness/anger/confusion = shouldn't have to do this anymore! 
Boogie out! Cya 'round the forums!