I played as Seleucids (hard/hard) and had very little trouble with the Egyptians. Don't think they are overpowered at all.

In my style of play I have very little infantry (2-4 hoplite units), the rest is light cavalry, chariots, and elephants. My hoplites rarely see any action anyway :-).

General tactics is send the cavalry onto the flanks. AI will usually detach some foot units to chase it with the result that the whole enemy formation falls apart into unconnected chunks. At this point I will pick a chunk and concentrate force against it (typically by having chariots or elephants charge from the front, while light cavalry charges from the rear) with the goal of making it rout rapidly. Rinse and repeat.

Same tactics work well against greek phalanxes with the exception that you never charge them from the front. But they are so unwieldy and slow to manouever that it's rarely a problem to get a cavalry unit into their rear and break them with a charge.

Actually the most annoying thing about the Egyptians were their masses or archers. But archers are afraid of light cavalry and I had plenty of it...

Fey