Hmm, well I suppose my perspective on this will be a lonely one on the board

I must admit that I've been offended by some things that I've read in traditional Orthodox materials regarding mental illness, even when I was Orthodox. But I was wrong to be offended in those cases, I think. Given the level of medical and psychological knowledge, what were the ancients or medieval people to make of an otherwise normal person who would suddenly or periodically seem to go crazy, or who had always been unstable? In modern times, however, I think we all must (and most do) use a different approach.
If people want to go to a religious healer, then I have no issues with them going (unless they're paying Benny Hinn or something). I don't for a second think that someone is miraculously healing them, but I do think that religion or healers can help in very earthly ways. If the person accepts the authority of the healer, then it's perfectly reasonable to expect at least some help just from the placebo effect. Often religion can provide support (socially, materially, and otherwise) for the ill person. And religion also helps to provide a stable context in which one can live their lives and grow as people; it can help a person find meaning, and give them a place to focus their energies, helping to facilitate positive results.
This isn't enough to heal someone who is
truly in dire straights, but it would probably help not a few people who have regular "depression," or other such issues. And even those in dire straights can sometimes be helped by religion, even if it doesn't "cure" them, in that it can help them cope with the problems. However, in the end, some people are indeed to the point where they need professional therapy and/or medication to correct the problem(s). I don't know if the story that was included about the fellow with schizophrenia is true, but if it is and I was a doctor in that situation, I don't think that I would have been that suprised. I would have probably assumed that he was either only temporarily helped, or (hopefully) was indeed cured and had simply been misdiagnosed.
As far as my own experiences with the Church and mental illness, eh, it was a mixed bag. Few people are so extreme as to suggest that someone should not go to a psychologist/psychiatrist. However, there is still a tendency among some to "trust in God" to heal you, and there is still a significant stigma concerning mental illness even in secular circles. I was always encouraged to "seek help" for the issues that I have, and never told to "just trust in God" (which would actually be
unbiblical). On the other hand, I have been scolded by Orthodox clergy because of issues resulting from a mental illness. I sometimes have a lot of social anxiety (from the bipolar, and other issues), and quite a few times I drove my wife to Church so she could attend, but sat in the parking lot reading the Bible or a prayer book by myself during services. In two cases, once with a Deacon and once with a Priest, I was publically rebuked for doing so. The priest went so far as to tell me to stop "playing games" (the ironic thing is, I think he was a professional psychiatrist before he became a priest). While neither of these confrontations had an impact on my leaving the Church, I can tell you that it certainly didn't make an already-anxious person eager to go to liturgy more often!
Hmm, so what can I say? I don't agree with all the theology and practice of the Church, but I don't think it does much harm in this day and age (not in the west anyway). I've read works like
Orthodox Psychotherapy by Met. Hierotheos, and while I would not now agree with the beliefs in works like this, I think it still presents a pretty stable and even at times lofty belief system in which to live out your life (
if you're a Christian).