Babylon 5 was a great show, but I agree it's going down hill fast.
Here are the major problems in my opinion.
First of all, the Cylons were very interesting the first season. Also, the non corporeal blond woman was interesting too. They could have done so much with the Cylons and could have made them to be something really unique. But what are they right now? For example, they don't "talk to god" like they claimed early in the series but apparently take instructions from prophets in a tub of goo that ramble on and on incoherently. Additionally, why is it that a pretty pathetic small group of Cylons are making all the big decisions on their own? It seemed in the first season they took their orders from god. Now, the squabble with each other and even betray one another.
In my opinion, they have ruined the "Cylon" element of the show and they know it. The "Cylons" they have created are border-line ridiculous and nothing like I had hoped for while watching the first season. Also, the non-corporeal blond woman that appears to Baltar has never been explained properly. The last we heard she was an angel from god, but we still don't have any more answers. Now of course an additional non-coporeal entity that looks like Baltar haunts the blond physical Cylon model.
This is the way things should have went. Way far back in Cylon space there should have been a home-world somewhere. From there the Cylons would literally "speak with god." Since they all have at least to some extent a hive mind they would all be capable of "speaking" to god. But this so called "god" would really be a demonic or "evil" entity. This same entity would be the one that sent the "angel" (lower demon) to Baltar. Eventually, this should have been revealed.
The top Cylons on the home world would issue the orders to the base ships in the field. This could be done via hive mind, electromagnetic communication (think sub-space transmission in star trek), or "angels" could appear to deliver the orders.
Personally, I don't like the idea of Baltar appearing to the blond Cylon. It really confuses everything. Is that entity from the demonic Cylon "god" or is it a true angel (or good entity) from the human "god"?
Also, what's stupid is that two Cylon "heros" could convince the entire Cylon civilization to stop attacking the humans and build New Caprica. They claimed to speak to their god and that their god ordered them to attack the human colonies. Why in the world would he want them to build a New Caprica? The fact a couple Cylons with a little tiny speck of a heart can go against the literal spoken word of god and bring the entire war to a halt is downright ridiculous.
Now the whole Cylon, talking to "god", and non-corporeal entity aspect of Battlestar Galactica is completely convoluted. I don't think there is anyway they can fix it.
Secondly, your right about the side stories. I don't like the fact that most of an entire episode was about Adama's ex-wife. It was a good episode in my opinion, but I want to watch SCIFI and not a soap opera. If she was still in his life and appearing on the show that would be one thing. But his ex-wife had been dead for a long time and it's silly to devote an entire episode to it. They could have mentioned it, but they spent too much time on it.
