One thing I've learned to do in HTW to get a usable formation at the beginning of the battle is to use the "Cavalry Charge" formation in the pre-battle selection. This seems to avoid most of the scrunched thin column problems. It usually gives a good formation and then I just move the cavalry to the rear or flanks, do a group select, then advance. Some of the other formations sometimes work as well, although "three line attack" and "three line defense" (my favorites) can rarely be used.
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