I think that RE should definitely be mandatory up until an age, if it's done a certain way. If children are taught simply what different religions believe in without being told that these beliefs are necessarily correct, then I think that's fine. I really can't see the harm done in teaching children which religions believe what and follow what ideals - it's not converting them or forcing anything upon them, it's simply educating them.
What's wrong, in my eyes, is teaching children that there is a correct religion. And by that I mean not necessarily saying that other religions are incorrect, but telling children what the beliefs of one religion are true. An example of this would be reading a passage from the Bible as a "factual" story. At a young and impressionable age, things like this could easily lead children to follow a religion which their parents and other family are not comfortable with.
Basically, teaching about multiple religions? Fine. Teaching a religion? Definitely not fine.
edit: SwiftSign summed up what I wanted to say quite beautifully with his post below. Especially,