Love the game, it is well put together but there are a few things that I think could be added, particularly to the diplomacy aspects of the game, that would balance things out a bit more.

1.  The game badly needs to give you the ability to threaten as part of a negotiation.  Often I will find my self as the dominant power in a conversation having to pony up a ton of cash to get a planet someone settled in my area of influence.  This is despite the fact that I am more powerful and my influence is going to take the planet anyway.  I should be able to say things to the AI along the lines of give me the planet for X amount and if you refuse I will declare war, or I will enact a trade embargo.

Threats are a very important aspect of diplomacy that does not seem to be handled at all.

2.  When under attack by multiple parties and a race goes to surrender there should be some sort of negotiation regarding who gets what.  Failing that if the parties are allied the surrendered empire should be split into equal parts and portioned out.  It is frustrating to be the big dog in an alliance only to have someone surrender to the faction that took on a very small portion of the work.

3.  When a race goes to surrender to someone they are not at war with the race they were at war with that prompted the surrender should be given the ability to threaten the absorbing empire with war for the territory.  Think about it, had Germany tried to surrender to Switzerland at the end of WWII no one would have recognized it and had the Swiss tried to enforce it they would have been attacked.  Moreover I should have the option to refuse to take on a floundering empire located 10 weeks away from my nearest ships or planets if I was not even involved in a war with them.

4.  Evil races should be able to undertake some military actions when not in a state of war.  Among these they should be allowed to destroy freighters and attack ships within their territory from which they could gain cash.  The offended power could always declare war in response but there are many times that one would probably would not and it would encourage the evil races to act evil by preying on the trade routes and ships of powers too far away, too weak or too engaged elsewhere to be considered a threat.