I said fire arrows because I recall flaming objects coming out of the towers, but my real point is, no way to destroy towers before they reach the walls. You might be able to destroy one if you can focus two turrets on it, but it really ruins sieges for me, knowing that the walls barely matter with siege towers. I can't leave the gates and sally forth, archers seem to be worse on the walls than on the ground, and it is incredibly hard if not impossible to get archers to turn horizontally on a wall and shoot at other units on a wall. I've seen the AI do it but I can't.
I think walls and towers are very important when fighting against the AI at least. The AI being dumbz means that I often find that my archers can rack up massive kill numbers as they mill about and try to deal with my calvary, which is another thing, I often find Sallying fourth worth it, at least in certain situations (trading a unit of knights for a hellcannon? Yes plz.) There was a story someone (I think umiman?) put up here before about winning a battle via sallying fourth with a uncountable horde of zombies, he had no way to kill the enemy army, but the zombies held them back long enough for the towers to bring about victory. As for the walls themselves, the ability to funnel and concentrate enemies into certain "killing fields" is something I've found very useful.
I'm not sure how good walls are in pvp, I imagine somewhat useful although less so against an opponent who can actually make okay plans and decisions, but thus far all my pvp with walls have been somewhat atypical (in fact, I've only had two such battles if I recall correctly, one where it was vampire v vampire and my flying circus swept the walls before the rest of my army got to them, and one where it was orc vs dwarf, and my orcs had an absolutely overwhelming numbers advantage so I ended up ignoring his dudes and just swarming over the wall and onto the victory point... It was sorta funny, his hammerers were easily getting a 30 to 1 kill ratio, but they just didn't matter in the long run ;.;) Edit: Actually I recall another battle I had, probably blocked it out cuz I lost. it was fairly evenish I think, I think the walls really helped the enemy win. Idk, I think they are okay.
I do agree that the way positioning on the wall works is really really annoying. I was excited when I saw how big the walls were and thought that there would be real maneuvering and such on them... Not how it currently works, sadly.