Christian Dungeons and Dragons
Dungeons and Dragons isn’t exactly popular amongst some Christians. The whole pagan gods and sorcery thing adds up to a double whamy of let’s-not-go-there. Others, as seen in this PVP strip, take a different approach to Christian gaming.
http://www.pvponline.com/2009/06/24/holy-roller/
For the record: I’ve played D&D. I can see how it may be a stumbling block for some. I view it as a matter of freedom and choose to see it as engaging with fiction. But that’s a wisdom decision for the individual.
Pop Culture Christ 
I agree with you. I think the biggest problem for many people is separating fiction and reality. For example, many books have been written on Tolkien’s religion and “Lord of the Rings.” In reading the book, Gandalf can be recognized as an example of just behavior and excellent moral character. Why don’t we condemn him for doing magic? Because Middle Earth exists outside of the real world of Christianity. In fact, that’s why Tolkien invented Middle Earth–he thought that to write about the real Earth would be an immoral attempt to imitate God’s creation.
For players who are interested in D&D but unsure about gods and sorcery, perhaps it would be useful to stress character behavior. Despite the existence of a fictitious world where gods and sorcery exist, players can practice morality by having their characters behave in a manner consistent with Christian morality (no fighting the monsters unless they threaten one’s life first, no stealing from shop owners, saving the peasants even though it’s inconvenient). In fact, provided the DM is interested in more than sending hordes of goblins, this could even be taken as an exercise in making moral decisions without the danger of real-world consequences (at least, if the campaign is done correctly).
Your position on Lord of the Rings is one I share. I think the same applies to Harry Potter and the use of magic in that series.