I've posted before on the somewhat fast and easy use of facts in this movie by Ridley Scott but this article was so good that I just had to revisit the topic.
"The second major anachronism is the movie’s approach to religion. Most people know that the Crusades were wars of faith. Crusaders underwent extreme hardship, risking their lives and expending enormous amounts of money because of their devotion to Christ, his Church, and his people. Crusader piety also manifested itself in extraordinary devotion to the Virgin Mary and the saints, particularly those saints who had lived in the Holy Land. The Kingdom of Heaven, however, performs the delicate operation of stripping religious piety completely out of the Crusades. Balian and his father appear to be agnostics. Other Crusaders, like the Hospitaller, are openly critical of religion. Indeed, all of the good guys in this movie seem to have no devotion to God at all, only a devotion to tolerance. The bad guys, on the other hand, are all religiously devout, which causes them to be either evil (like Guy and Reynald) or mad (like the glassy-eyed preacher who chants, “To kill a Muslim is not murder, it is the path to heaven”). In other words, the medieval world is portrayed in much the same way that Hollywood views America: Smart people either have no religion or do not take it very seriously. The rest are right-wing Christian fanatics."
Go read it all.