I was just reading an interview with ken Turner lead programmer and Dan Toose designer in PC Powerplay

Do big battles coupled with individual unit textures and one-on-one fighting mean we'll need a massively powerful PC to run the game?

KT: Not at all. All the effects in the game use Shader Model 2.0 and while we've raised the minimum spec considerably, you should still get good performance from a pretty average PC. If you look closely, you'll see most of the fighting is what we call "Hollywood fighting". Weapons don't actually connect and soldiers don't actually touch. There's no collision detection at all which saves use hugely on CPU overhead. The combination of good art and clever camera angles means the game can look awesome and not choke your PC.
I thought I read somewhere that M2 soldiers would actually hit each other, not that I'm complaining as I love how smooth it runs on my old PC.
What excites me most about the no collision detection is that I was under the impression that the biggest obstacle to putting even larger armies on the battlefield was collision detection. Does this mean that the next TW game will maybe have much larger/realistic sized armies?