The AI's troops receive a +4 morale bonus in combat, but I think that's it. Of course, that much of a morale bonus can make a pretty huge difference!
As for archers, yeah, I think quite a few of us have that problem (I know I do, anyway). As a rule, most missile/skirmish units in MTW require the player to baby-sit them to at least some extent. Some units are better than others, but you still have to keep an eye on them so that they don't get caught in melee combat.
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