Regarding Difficulty level...

[penguinking]

The difficulty depends on what you want to do. I usually play VH/M; it provides a challenge and the battles are realistic. However, if I'm playing as an "easy" faction, such as my Epeiros campaign, I'll up the difficulty to VH/H to prevent it from getting boring. I would recommend playing on VH/H with the Romani if your not using house rules. Roman units are generally well armored with pretty good morale and battles can get boring on medium. However, this does have negative side effects, and battles are less realistic. I haven't used Darth's Formation Mod, but I've heard it's helpful in making the Battle AI smarter.

If you want to play a historical game with a bunch of house rules to play historically, than M/M or H/M is the best, as I did with my historical Romani campaign. The challenge in those campaigns comes from following the house rules and playing true to history.

I would advise against playing on VH battle difficulty. While the battles do become a greater challenge, on VH battles just become very unrealistic. Your units simply don't work how they should, and for me it detracts from gameplay.