I've run a couple of scenarios, and it depends upon the defences of the settlement you're defending... if you got a huge stone wall, then the towers could take care of any siege equipment for you... but if you defending a town with a wooden wall, then the attackers will be on you before you got a chance to destroy the siege equipment - so you then have to hold each point of attack long enough to prioritise & execute your plan.

In the following replay, I deliberately gave myself a weaker army so you can see that it can go right to the brink... but if you keep a cool head and don't give up, the day can easily be yours. http://www.mediafire.com/file/zzjdbyzgd4x/siege defence.rpy (copy to replays folder - usually found in Program Files/SEGA/Medieval II Total War/replays)

Sure it got messy... I lost my general because I was dumb, and I could have maximised enemy casualties if I waited on their regrouped units returning to the wall instead of giving chase... but it hopefully helps you to see a method of defending against a siege assault.

If you want to try it for yourself, copy this custom battle file to your "custom" folder (usually found in Program Files/SEGA/Medieval II Total War/custom) http://www.mediafire.com/file/qmmjdl...DefendTown.cbx
When I played it, I set all my infantry on "guard mode" so they wouldn't do anything stupid like run down the ladders in pursuit of a routing unit only to get stranded outside the town with fresh enemy units coming at them. Incidentally, none of the units have any upgrades added, so I made the assaulting army a 10K army, but used less that 6K on the defending army.