i play the game on crippling pretty much always and have no problems beating the computer.
right now i am busy with my biggest challenge, on a gigantic field i have war with the biggest IA in the game (who is right next to me) and nearly war with my other neigbour + another IA but he is to far ahead to be of any danger.
also i have war with 7 minor races

crippling is a good difficulty to go if you want a challenge but are not that advanced in the game yet. just build economy, keep up with the tech and indeed take advantage of the IA in war.
(i won easely against a much stronger, much bigger, much better drengin empire just because i could war better than he could. he had double my production, economy, standing army and double tech. i beat him easely)
one question btw, how do people know whats gonna be in 1.2?
i tried searching the forums but couldn't find anything about 1.2 yet.