Retraining is very usefull.

I tend to do the same as cherrydanish and move all partial units back to my most developed province for merging, then any partial's left over get retrained with the best armour, moral and weapons available. Any units that gwet specific place bonusses get sent there to retrain, as all the new recruits will be valour one.

LEftovers like crusade units, bribed ones and loyalist rebellion troops get merged to full and sent out, or hang around the capitol looking mean.