I understand that the OP is quite old. But playing FW right now, I would like to chime in anyway.
I'm playing on medium difficulty (the default setting) and the game is hard but not insanely so. As usual the AI is not very challenging and makes some interesting mistakes quite frequently (e.g. not attacking units in front of a city wall or ending movement in a river.) Actually this is laudable. The AI does not cheat, there are no surprise reinforcements (switch of the Fog of War to convince youself), there are no hidden boni and the AI works to the best of its capabilities, which, like always, isn't that great.
The designers compensated by giving the computer superior numbers and better quality units. So, business as usual. The typical counter measures are effective (keep you troops together, concentrate your firepower, employ diverse tactics.) What is annoying is that the designers decided to move the goalpost on a few missions, i. e. you fullfill your mission objective and through a narration the mission is expanded, making you miss the gold level. But that's really all.
I enjoy the game.