Battle AI seems to get much better as you go up the scale from Easy to Very Hard. At the lower setting in siege battles in particular it will do foolish things. But on setting of M it seems competent and at the higher settings fairly astute to even cunning. Siege battles seem the ones it has most difficulty with, however field battles are generally sound tactically.
I don't agree with this. I played many custom battles last night on the hardest difficulty, and the AI was categorically terrible.