I'm not sure I quite understand the regeneration aspect of MTW and SW. I thought I remembered in STW anyway, that after a battle if the enemy daimyo lost all but say 2 bodyguards, the next battle he would have the full compliment back. This wasn't the same in MTW? It's been a while since I played MTW so I don't remember. I never did notice that the AI couldn't retrain units though. Perhaps because I seldom retrained in STW and MTW anyway.

My £0.02 is that the non retrainable full size bodyguard units are the better option
I agree (from what I understand). Those Daimyo and Hatamoto units could be so hard to kill, especially the last one! I would often have my whole army surrounding them, taking many casualties compared to their 12 men, knock them down to 1, taking casualties, he would rout but remain in the middle of my army, inflicting more casualties, and seemingly stay there for 10 minuets inflicting still more casualties until he some how broke free of all those men and ran off the map! I just wanted to kill the diamyo and his sons but they would escape with one or two men, then the next battle I would face them again in a stack with about 3 more full hatamoto units! Don't take this as a rant, I'm just babbling with the keyboard! :)