well, concerning the armies, polices, etc.: well, i never said the police/army could take care of things. they're there as firendly mooks, and imagine going through a city in a terror mission, and there are civillian corpses everywhere. you see a policeman corpse, and there is a pistol next to him. ten feet down the line, a dead Sectoid can be found. you find the police station, some poor souls fortified it, trying to protect it, but the aliens had an explosive weapon of sorts, and it blew the thing right up. you see corpses (or bits of them) everywhere. and lastly, you find a military APC, smoke coming out of it, soldier corpses around it, and some way away from them, a couple of dead sectoids. trust me, this would add a whole new level to the gameplay.
oh, and if you are in good standings with the country in wich a UFO crashed, the police and military will corner it off. if not, they won't do shit, and there will be civies on site. let me explain: if youa re in good standings with the authority, they will believe you. if not, they will probably think: "they're pulling our leg. there are no such things as aliens!". well, it would be so until the first terror mission. then, the civies (in countries with who you have bad relations) would be replaced by the army/SWAT teams. you know, the "don't tell us what our military isn't capable of!" stuff.