For archers - I set my missiles in narrow columns when I know I will punch one hole in the enemy walls and I'll have to shoot trough it to get to the units behind. It's by far the most effective in such a case. When leading a field battle, I keep my archers in 3 or 4 lines deep formations depending on how many I have and how much infantry I have covering them.

The reason being, as you already noticed, that the momentum of a charge cuts trough thin lines like a knife trough butter, and broken lines means faster routing (or instant routing). In M2TW the units have "mass" as a hidden stat, and that affects their performance in relation to the opposing units/lines.

Of course a uint of spears in schilthorn will resists a charge better than a unit two lines deep, it makes sense if you think about it. As such I keep my lines relatively thick, but I only go for squares of infantry for city fighting. If you have superior units however, a thin line will envelop the enemy and start hacking from their less armoured sides than frontally. For example, fully upgraded armoured swordsmen versus run of the mill infantry - due to greater defence, you will lose almost no men, while the enemy line will crumble from the sides.