The current 1.3 is probably a better game than 1.2, mostly because it isn't as easy to economically dominate. The game I'm playing has been the best game i've had in a while (enjoyment wise). (probably because I went back to playing maso, and didn't get a good colony rush)
But for all the improvements, you still see the AI doing some stupid things. Actually the errors tend to be more like the AI forgets to manage certain things or design decisions that in practice, don't work.
Here are the things that bug me, that I'm getting to think will never be addressed :
1) AI fleets just sitting around, probably left over from a previous war.
2) AI planets (mostly minors) with 10 ships in orbit that are basically out of order.
3) AIs never ending desire to build crappy ships in huge quantities.
4) AIs that are losing horribly trying to send hords of pathetic escorts/transports to their doom.
5) escorts.
6) AI not using defense correctly.
7) some AIs not using farms, combined with AIs lack of soldiering = easy conquests
8) overall lack of feedback. Seems like the AI doesn't ever change gears. IE I attack a planet, and they don't adjust what they're building there. Why keep building a transport ?