Just finished my first game on 1.1, I played 4 AI's randomly chosen on Tough on a Large galaxy.
I got Humans, Altarian, Yor and Arceans.

The beginning was pretty tough, I went -500 every other turn until a few big planets I had started getting me cash, using the new+improved PQ (although it doesnt seem to work sometimes?? I think it doesnt kick in when a planet culture flips).

After my economy got going, I didnt need to fire a single shot, I could bribe the AI easily to keep them from attacking me, and in the end (right before I got a tech victory) I ended up getting alliances with all of them...
I boosted our "relations" with lasers, like 1-3, then sealed the alliances with lasers 4......
Weapon techs seem like glass beads that you can trade to the AI now if you have soemthing they dont have or happen to have more tech.

As a side note, is "tough" still the hardest cheat-free difficulty?