Does anyone know if the NPC cheats? During my recent single player game, i have him nailed down to about 20 territories (huge map), yet he has a limitless amount of gold to garrison fully with executioners.

This is after i have slaughtered his lvl 20 heroes thrice over...so resurrection costs must've kicked in already. Thrice over with fully loaded troops.

In comparison, my gold is hovering around 0.

I can't tell you that I know, but I'm convinced that he cheats on the economy for the same reasons you outline. I can live with that - it's more important that the strategic and tactical AI is good (and it is) for the game to be fun, so it's an acceptable shortcut to cheat on economy, but it can be a little frustrating yes when his heroes come back again and again with full armies each time :)

That said he cheats, but not to unlimited. If you take enough provinces he will slow down on heroes and troops. So it's a bonus - not an infinite supply of gold...

Yeah, I also noticed that after getting most of AI provinces it starts to buy weaker units and becomes less dangerous. Still it's monstrous Warriors are quite a thing to stop...

So, like Kazper said, it's certainly is a bit of a bonus in the economy department (or they just start with a lot of gold), but not a constant 'free unit' or 'free gold' rule.