From what i've seen the Military rating seems to be mostly calculated from Number of ships as opposed to power. The AI nearly always has a higher military rating then me. But when we go to war i crush there legions of weak ships with my more powerful ships.
I'm with Cikomyr on this one, you can really run circles round the enemy with faster ships, makes it easier to protect your planets from invasion too as you can intercept much more efficiently. Several times i've held more powerful civilisations at bay by avoiding their combat fleets and only fighting their transports/escorts until such a point as i could get an advantage.
It can be a bit exploiting as your debt from upgrading gets wiped to -2000 after a turn, so if you've built a lot of hulls you can upgrade them at any cost and most of the debt gets wiped. Then all you have to do is pay that 2000 and however much you were in the black before hand.
It does seem very random, in my last game i'd got all but 2 of the Altarians worlds and they go and surrender to my Ally. I've also never had a civ surrendering to me when i'm attacking, they always surrender to someone else and rub it in my face
It could be they had more advanced miniturisation technology then you? It would allow them to squeeze more in. If not had they built the Hyperion shrinker?
I used the same strategy on my last large map at bright, except i'd got to HyperWarp III so they were moving about 40 or so. Also strategically it makes a lot of sense to get them there as quickly as possible and preferable be able to out run combat ships.
