I have used peasants successfully a few times, but the only area where I have had unusual success with them is when defending a city assault. A few times I've been unlucky enough to have a city garrison mainly composed of peasants assaulted by the enemy before I could get reinforcements there. Some of those times I have still won. In those cases, I always deploy in the town square. This negates morale for me and allows the mass numbers of the peasants to become more of a factor. If I'm lucky enough to have at least one other semi-decent unit in the city with them, I try to surround the incoming enemy in the square with the infantry and then hit them in the rear with the 'better' unit. Sometimes this works, sometimes I die to the last man. For an example, refer to the "Miracle of Thessalonica" in the BI PBM write-up in the Throne Room.