A great idea. I was always a fan of using Lego minifigs and terrain for wargaming and RPGs, although I never actually did it save for a single make-up game of Pirates vs. Government Forces during my childhood.
Here is a great overview for using Lego for such games:
http://zenseeker.net/BoardGames/LegoGames.htmI especially recommend further research on BrickQuest, there are handy tutorials for terrain and figure preparation, including ideas for basing.
One time, when I have the spare cash, I will go back to it...

Best of luck with your efforts!