You wouldn't want the goblins to be made upset at the sight of their own demon though. A slight tweak though, and people that share the religious spheres of the megabeast/demon would be charmed instead of horrified.
Charm would work the opposite way, where most everyone is charmed, unless the person worships the exact opposing spheres, then they're horrified. So someone who worships evil seeing something that charms good would be horrified instead.
Also, stick a number next to the charm/horror tag, to determine the happiness bonus/penalty at seeing them. So some creatures could be slightly impressive, while others could be overwhelmingly so. Imagine if the demon caused a happiness hit of 500. In order to fight it, you'd have to have your dwarves be so ecstatic with their surroundings they'd be able to handle the moral hit. Most would tantrum before being able to attack. That'd make the demon far more powerful and scary.
I'm not sure that charm should work as "you must defend it" though. I'm thinking charm would make them like the creature, get a happy thought, and have them simply not attack it if their happiness is above a certain level (unhappy enough people could still attack).
[ May 27, 2008: Message edited by: Fieari ]