I've always like the idea of a proper 2 tier "X Nations" - Tier 1 and Tier 2 with promotion and relegation, or at least a play-off. That would certainly allow Tier 2 national sides to have something to aim at, with a chance to expand and improve the game in their region. When Italy joined the 5 nations there was a lot of scoffing and the assumption that they would be perennial wooden spoon candidates, but they have taken some big scalps and improved hugely over the years.
We do have the two tiers of the European competition with the 6 Nations and the Rugby Europe Championship. If we do get promotion & relegation between the levels, I'd like it to be every other year. As things stand in both competitions, you either have 2 home/3 away or 3 home/2 away games in the competition. I'd like to see any promoted side have a chance to play all the top level teams both home d away before they are possibly relegated, if only so the fans have the chance to see their players in Twickenham, Millennium Stadium, Aviva, Muddyfield, Stadio Olympico, & Stade de France. Similarly, the team relegated for 2 years would allow the rest of the T2 teams/fans a chance to play at one of the major venues.