In terms of the amount of factions and the role they played. I was mostly satisfied with Morrowind, I would say. There were enough factions that the player had a fair degree of choice, and characters of each type would have more than one faction to choose from. For example, both the Mages Guild and House Telvanni were suited for mages, one could also argue that the Temple and Imperial Cult were also good for mages, since some of the skills they required were magic skills, though I'd argue that those two factions were more factions that were geared towards characters of any class, and which, if any, to join should depend on the character's personal beliefs. For fighters, one had the Fighters Guild, of course, and House Redoran, and the Imperial Legion, and for stealth oriented characters, you had the Thieves Guild or House Hlaalu, or if you prefer assassination to stealing you could join the Morag Tong, but your killings didn't necessarily have to be stealthy. I'd say that the Dark Brotherhood in Oblivion is a better example of a stealth oriented assassin's guild as while you could generally complete your contracts by any means as long as the target was dead, to get the best rewards, you generally needed to be subtle. Having TOO many factions to join wouldn't be a good idea as each faction would end up being less developed. At worst, you could get to a point where different factions felt like slightly different variations of the exact same concept. Morrowind seemed to have the right idea in terms of how many factions there should be, though. Even though some of the faction quests could feel a little generic at times, the lore on the different factions helped to ensure that they didn't all feel the same.
Also, I like that Morrowind, aside from the basic Fighters, Thieves, Mages and assassins guilds, also let you join some religious and political factions as well as the Imperial Legion. I wish Oblivion had had this too. I seem to recall that before release, I would have at least liked to be able to join the Nine Divines faction and do quests for them, though what I'd really like to see in that area in a future game is the oportunity to join a Daedric cult, now, it might be a little unreasonable for a joinable cult to exist for every Daedric Prince, so I'd say that Bethesda should choose one or a few Daedric Princes who play a reletively important role in the lore of wherever the game takes place, and let the player join a cult dedicated to them. I've always enjoyed doing the Daedric quests, they can be fun quests in themselves, and they always offer a reward worthy of whatever task they involve, but it doesn't need to be limited to just doing one quest, and getting a unique item in return. As far as political factions, to use Oblivion as an example, I would have liked to be able to work for one of the counts and countesses, or maybe work for the Elder Council and try to help them keep the peace in Cyrodiil in wake of the recent problems, of course, depending on where the game takes place, what kind of factions would be appropriate may differ.
As far as how factions tie into the main quest. I'd say that the main quest shouldn't require you to join most factions, perhaps there could be one or two factions that you join during the main quest, sort of like the Blades. But these should be exceptions, for the most part, the major factions should be independant from the main quest. You shouldn't have to join them to complete the main quest, and if you choose to join them, you should be able to complete their quests without the need to join the main quest. This isn't to say that factions can't ever interact with main the main quest, after all, the factions are part of the game world too, so it isn't unreasonable if players must occassionally make contact with them for parts of the main quest, kind of like how in Morrowind, you needed to convince the various great houses to choose you as their Hortator at one point, and in such cases, being a member of that factions could allow for solutions to the quests that wouldn't otherwise be possible, but by no means should being part of those factions be necessary to complete the storyline.
I'd say that factions should conflict where it makes sense, but if two factions have no logical reason to object to you being a member of the other one, the game shouldn't count you out from joining one faction if you have joined another. To once again bring up Morrowind, that game had clear examples of conflicting factions, most notable were the three great houses. If you chose to join one great house, you could not join any other, something which you would be warned about before joining. This made sense according to the lore of the game because the three houses were conflicting political organizations each pursuing its own interests, which have often been known to get involved in conflicts between houses. Also, a less obvious example occurs with the Thieves Guild and Fighters Guild, while neither faction would deny you entrance if you were a member of the other, some quests for the Fighters Guild would go against the interests of the Thieves Guild, once again, this made sense, as the leader of the Fighters Guild later revealed that he had made a deal with the Commona Tong. On the other hand, the Fighters Guild would not object to you also being a member of the Mages Guild, and there's no reason they should.
And speaking of factions, they should require you to be good in their appropriate skills to reach the highest rank, someone who doesn't know a thing about magic shouldn't become Archmage. In Morrowind, this was accomplished the easy way, by not allowing the player to advance to the next rank without having a high enough level in at least some of that factions required skills, but I also wouldn't object if this was actually accomplished by practical tests of the skills. Something which, one might argue, Oblivion accomplished at least in the Thieves Guild, because to even receive Thieves Guild quests, you needed to sell some stolen goods to a fence, and if you succeeded in stealing enough items to accomplish this, then this might be taken as an indication that you're a thief worthy of the guild, also, the quests themselves were obviously designed under the expectation that you'd complete them using stealth, and killing people during your quests would be punished. Even the Dark Brotherhood might be said to accomplish this to a lesser extent, since to get the bonuses, you generally needed to use stealth, and the presence of at least one Dark Brotherhood NPC who is more of a warrior type and who is specially said to hate using stealth clearly shows that if you can kill people, they'll still let you join, although you won't get the best rewards for their contracts unless you use stealth. But in the case of the Fighters Guild, as long as you could kill enemies, you could advance, you could get away with just taking advantage of sneak attacks to kill them stealthily, or even using magic, but the problem is biggest in the case of the Mages Guild, because it seems to me that they're quests really don't require any skill in magic at all. While they give you tasks that can be accomplished using magic, generally, mundane alternatives work just fine, in the few cases where you actually needed magic, there didn't seem to be anything stopping you from just using a scroll instead. Thus, someone who has never cast anything better than novice level spells can potentially become the next Archmage, and this needs to be adressed in the next game. If you're going to define you're factions based on the character specialization they're aimed at, you need to make sure that the player actually needs to have those skills to reach the highest rank.
I would say that factions should sometimes give you access to unique items, mostly in the form of rewards for their quests, or perks for advancing in rank, because a reward feels much less impressive when you can find the same thing anywhere, though not every reward can be something really amazing. The early quest rewards should be fairly basic, but you should definately start getting some unique items for some later rewards. I don't mind if I miss out on a few unique things if I choose not to join a specific faction, it just gives me more reason to join that faction later on.
But although I've said some good things about Morrowind's factions, one aspect about the handling of factions which I liked in Oblivion better than Morrowind is the fact that in Oblivion, aside from the Arena, the factions you could join tended to have cohesive storylines, whereas in Morrowind, for the most part, there "questlines" were just a series of disjointed, often rather basic tasks that really did not have that much to do with each other. While the quality of the storylines themselves varied somewhat between the factions. The concept, I felt, made the faction questlines feel a little more rewarding. For one thing, a single, continual storyline gives the game more time to develop things, thus allowing for better writing. It also makes me feel more inclined to do the next quest, with a well written, continual storyline, I want to do the next quest because I want to see what happens next, with guild quests like Morrowind, I only want to do the next one to get the reward for it and advance in rank. Obviously, not every qust in a guild can be part of a larger storyline, not that it was like this in Oblivion, I seem to recall that the Thieves Guild storyline for example didn't really start until you started working for the Gray Fox, and the recommendation quests for the Mages Guild were pretty much independant tasks that just had you solving whatever, often fairly minor, problems the local guild halls have. I'd say having the early quests seem like independant tasks and then having the player take part in the main storyline of that faction's questline later on is the best approach as I tend to think of the early quests as just proving you're worth and introducing you to what sort of thing you can expect from that faction while with the later quests, you start to really get involved in the guild's affairs.
I just hope the thief and assassination missions don't go all "goody goody" on us again. Stealing stuff is generally bad. You're a thief, a lowlife that takes other people stuff for their own profit, not Robin Hood. As for assassinations, as the movie RED pointed out "Wait, you guys don't have people killed. Your the good guys. I'm the bad guy, I have people killed."
They seemed to make it pretty obvious that the Dark Brotherhood was meant to be the evil faction in Oblivion to me, although you do have a point about the Thieves Guild. In Morrowind, on the other hand, in the Thieves Guild, you stole stuff, the game never went out of its way to tell you that you were a horrible person for doing so, but it didn't exactly try to make the Thieves Guild look like upstanding citizens or anything.