On a side note make sure your setting the actual AI to "hard" not just the world difficulty. The world difficulty just changes how resources are scattered on the map and the wandering monsters spawns.
When your selecting enemy factions on the map each has a difficultly slider. Once you set it up once it remembers the setting next time you play. But yes its the AI is weak still.
As far as on Brad's 1.1c build I played 9 enemies each on hard and found the AI making squads and using lord hammers and stuff (still skimpy on the armor). This basically blocks the super unit crushing everything method since they can actually hurt you no matter what armor you're wearing. Well at least until you level up the armor bonus tech like 6 times.
I don't think the AI can handle being rushed especially if you are the both empire or both kingdom. They might last a little longer if they are opposite since you will face big penalties when attacking their cities. I can usually wipe out my closest enemy fairly quickly, after that the others should be fairly fortified and should slow you down until you spend some time trying to out-tech them (which logically shouldn't be possible with their incredible bonues to their research).
I'd incriment the AI difficulty one notch at a time and find one you like. I would not assume cranking it to ridiculous will automagically be the most difficult. I think the amount of resources confuses it and it makes dumb purchase decisions. Some thing like "Holy crap I have 10000 materials I should spend that. I'll make a zillion spearmen." Instead of building metal equipment because the materials are through the roof.
I'd also get brad's patch it is better. I havn't tried hard on 1.1d I'd probably start there (I tried challenging and I rolled over them with my sovereign and his son, so that was not much difference from normal).
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