Some ransom

[Ciaran]

Strictly speaking, ransoming would almost always be the better option (I don´t do it often, though), as you get back your surviving veteran soldiers. And valour is never lost, but tracked by the game on a per soldier basis, according to the Beginners Guide. There is also an option to create logfiles showing it. So, while it seems like the valour rating of a unit goes down after retraining, that is only the average valour. So, especially if you have a veteran unit, or one that heroically fought before routing, you should consider ransoming those few surviving killing machines.

[Gilrandir]

Strictly speaking, ransoming would almost always be the better option (I donґt do it often, though), as you get back your surviving veteran soldiers. And valour is never lost, but tracked by the game on a per soldier basis, according to the Beginners Guide. There is also an option to create logfiles showing it. So, while it seems like the valour rating of a unit goes down after retraining, that is only the average valour. So, especially if you have a veteran unit, or one that heroically fought before routing, you should consider ransoming those few surviving killing machines.

As Drone in post #3 remarked, heroically fighting units usually take so heavy casualties that they are reduced to few people that will just dissolve in a mass of zero-value retrained unit soldiers. Besides, how can you be sure that you will get precisely that unit of outstanding fighters back, but not a heap of peasants?
By the way, does the AI return all captured soldiers or only some of them?

[Ironside]

As Drone in post #3 remarked, heroically fighting units usually take so heavy casualties that they are reduced to few people that will just dissolve in a mass of zero-value retrained unit soldiers. Besides, how can you be sure that you will get precisely that unit of outstanding fighters back, but not a heap of peasants?
By the way, does the AI return all captured soldiers or only some of them?

All of them.

Come to think about it, while the unit quality might be lower than normal (aka the UM runs easier than the knights), unless they're hit badly by v&v, the runners will at worst be valour 0 and probably higher (some veterans should've survived), so the quality of the ransomed men will be higher.
So quality wise, if your army didn't contain any fodder units, the ransomed men will almost always be better than fresh recruits (and the same quality in worst case scenario).