Although I'm aware you're speaking specifically of TA, I feel it necessary to point out that the Thalans are only "duds" in TA. In DA they're arguably among the best. Even so, in TA, they're absolutely ridiculous (and by that I mean good) if you can get them going fast enough-though that's a very big if. There's also the problem of the AI only building embassies, as that's the only thing it can build (more of an AI bug than a Thalan bug), as well as the fact that it doesn't (as of last check) replace former planetary improvements rather than upgrading (again, also much more of an AI bug than a Thalan bug).
Iconians have always been viewed as among the worst. I don't really have much to say on them.
The main problem with the Arceans is the AI doesn't appear to know how to use/abuse/exploit the First Strike ability that Super Warrior gives it. I'm aware of the speed "problem" they have in TA, and that probably compounds it-but this is merely a symptom of the problem of the AI not being able to know what to do with ships above a certain speed, or even to build them, not really a problem in and of itself.
As for the Drengin, they're not bad, they just get Super Dominator Corvettes that are built with particle beams (or equivalent), rather than their current tech (at last check, which admittedly was some time ago).
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A (real) spectator mode would be awesome, whether it's of an AI on AI match (presumably you could see what each side is actually doing, though this could make games take longer) or you could actually watch a human player against an AI. Personally, I'd prefer that over multiplayer.
In the same vein as this, and much more simple, I'd like the ability to set up teams, as you can do in scenarios. Maybe this wouldn't make it MV legal, I'm not sure how that would work out, but I'd love to be able to go into Sandbox and play me and the Terrans (for instance) against the rest of the galaxy, and not have the other AIs attack each other; just us. I'm aware that you can set /relations/ with you to Team, which in effect gives you one team, but you can't set up another team of only AIs, which is what I'm looking for.
Maybe I need a new thread for that-I'm not sure.