Well, take everything you read from us with a grain of salt; the people still left around here (especially on the strategy forums) tend to be top notch players which have long since learned how to pummel the AI into warm, pastey goo. When we talk about the "artificial idiot", it's because we're throwing advanced tactics and strategies at it (not to mention exploiting its eccentriticies) that no AI programmer could really prepare it for. There are some higher difficulty levels, but these just involve an AI with an absurd resource cheat.
I'll start with the good stuff. The AI is a solid opponent that will use all its units competently, though it won't use any fancy combos or advanced maneuvers. It will build and maintain a decent empire and a well-balanced fleet. It's generally a good judge of fighting strength, picking its time and place to attack... and to retreat. It's a fairly well balanced opponent, and definitely a good one to hone your skills against.
Biggest problems with the AI are these:
1) Doesn't know how to use starbases effective, or counter starbases effectively. This leads to a situation where the player can blunt the AI completely with a very modest expenditure of resources in starbases, while the AI gets highly limited protection from blowing virtually all its savings on these things.
2) Doesn't maneuver its fleet or manage its support cruisers or capital ships effectively. Its only real tactic in battle is a head-on charge, which can be suicidal against certain types of fleets or defensive positions. Tends to get its capital ships killed rather easily.
3) Poorly balances its fleet, economy, and expansion. It's particularly slow and disorganized with its early-expansion, and it doesn't plan out its logistics space very well, often leading to silly situations where it only has 2 functional factories to serve its entire empire, or it will forget to build culture and won't have any space left. This is particularly notable on the highest (cheating) difficulties that will fill out all their logistic space very quickly due to their high income, leaving no room for future additions.
4) Often won't retreat when facing an enemy starbase or under the effect of phase jump inhibitors, fighting to the last man and losing its entire fleet needlessly. It's generally underestimates of the fighting strength of your starbases, particularly if they have backup. This can lead to a situation where the AI repeatedly suicides itself on the same defensive position.
