After reading this AAR I decided to give the strategy a try. It's going pretty well, and I thought I'd share some thoughts and observations.
First off, the game details. I'm not up to the upper difficulty levels yet, so this game is being played at Challenging. Medium-sized map, 6 opponents. I'm playing the industry variant of the strategy and didn't want to mess with spies, so I took the Yor (+20 social/military, +100 loyalty). My discretionary points went into economy, morale, and population growth, most map settings were set at random. A year in I can tell that I got abundant stars and planets, and I'm guessing common habitability (there seems to be one habitable planet around most stars). Resources are definitely rare, and anomalies seem to be uncommon. Stars are clustered, but not tightly so.
My starting planet was great... if I were going the research route. 300% and 100% research bonus tiles made me cry to build factories on them, but I stuck with it and rolled into the colony rush. A couple decent asteroid fields helped my 2nd home-system colony and my first out-system colony off to a good start. My home system was positioned in a bit of dead space on the edge of two clusters, making me have to travel a bit to reach anything (luckily the Yor start out with some engine tech). I set the sliders to 1/99/0 (m/s/r), focused my planets on research, and started ploughing through the diplomacy techs. Taxes started at 9% for 100% approval and spending locked in at 100%. So far, so good. The amount of production I was cranking out was astounding, the budget defecit equally so.
The first real problem I ran into was finding someone to trade with. When I finally did find other races, it was the Krynn and the Terrans. Ugh. Still, I was able to sell enough to them to keep me out of the red for several turns, but with ~20% of the map explored and no other races visible I was forced to lower my spending and raise my taxes. At its worst my spending got down to 75% and I was tweaking the tax slider by the turn to keep all my planets at 41% or greater approval. Then in the span of three turns I met the Korath, Korx, Torians, and a minor. I played the middle man in a lot of tech sales and set spending back to 100%; taxes got lowered so that most worlds have 100% approval.
This is the point where things really started rolling along. By this point I was researching Magesty, after covering most of the other diplo/government techs. I largely followed the order suggested by Wyndstar in his "Conquering Suicidal" thread, with occasional 1 or 2 turn diversions to research something to sell to the AI players. On their own they just weren't coming up with new tech fast enough to keep me solvent and I didn't want to sell them a diplo bonus.
First war was the Korath, after I goaded the Terrans into attacking them. It was messy but brief; the only weapons tech I had was the stuff they had traded me so we were on a pretty even keel. My production was absolutely ridiculous though, and sheer number of ships flowing to the front lines bore the enemy down.
So that's where I sit now; the Korath are neatly assimilated, bringing me up to a neat dozen worlds spread across a quarter of the map. The 6th AI turned out to be the Altarian Resistance. I'm eyeballing the terrans or the korx as my next target, even though the krynn are right in my back yard bottled up by me on three sides. The krynn are the only people I have warm relations with right now, and I'm hesitant to give that up, especially when they have to slog through my territory to reach any of the remaining uncolonized worlds. I have yet to see a barren world to make use of that side of my super ability, but the slowdown is lovely.
Based on my game so far I'm guessing this strat would be really dicey on lower difficulty levels where the AI have economic penalties or with any fewer than 6 AI in the game. As it was I had to weather a 10 turn economic crash before I had enough races to trade with, and they don't always have the cash to buy. Moreover, they aren't keeping up with the tech very well, making it hard for me to get and sell new tech from them. I think this strat actually benefits from stronger AI at higher difficulties. Still, its been a very enjoyable game so far, and I certainly have the game in hand at this point.