I assumed that the octagon comment was made in jest as they obviously don't tesselate. In 2D they are really just squares with the corners cut off but function identically.
B0rsuk's comment about keeping a square grid but calculating movement based on real distance (e.g. moving on a diagonal costs sqrt(2) per square) is interesting but I agree with him that in a grid-based game this is too confusing for players. In a grid game we all assume 1 grid cell = 1 unit of distance in all cases and this is something that should stay as it is.
Landisarus noted that hexes are "only 50% better than squares". In my OP, I acknowledged that *any* grid system (hex or square) is of course only an approximation (which is in fact why they are useful in the first place) of the space it represents. But why not approximate it as closely as possible? Hexes tesselate and are more accurate than squares. Yes, you have to zig-zag to move in certain directions. But you have to do that with *any* grid - square as well. And even with zig-zagging you get less distortion of disance in general. Overall, they are just able to represent the underlying 2D space more accurately.
Now, what I do acknowledge is that often it is just easier *by convention* to think in terms of left/right forward/back and in that way squares can be better suited in some cases *where there is a clear forward direction*. This usually occurs when you are lined up against an singular objective as reference (say assaulting a city wall or crossing a river). But when this is not the case (which is generally true of strategy games where cities, units, etc. are all over the place) and you need to consider movment in an omni-directional manner. I still argue that hexes make more sense.
Anyway, I'd like to stress again this is just my $0.02 and I bring it up just as a point of interest for future consideration. I'm happy enough with squares and confident Elemental will play just fine with them. But I can still wish that they'll consider hexes for future projects - right?
Thanks for the input everybody. Cheers, -J.