If you want to have AI that is at least a bit entertaining do this.
Generate random map in editor (the model I used is M 3 players, no undergrond). You have to use original rmg to be able to edit the map.
Edit the map in editor set ai players as allies against you. Give them grail in town. In event editor set an event that will give every day +2 wood/ore +1 other resources, and +3000 gold to all AI players.
With such settings you should normally even loose with AI from time to time, however with vcmi AI this will not happen. However AI will sometime sit in castle with full army and you may be unable to attack take such town, also some heroes will have a big enough army for you to have an entertaining fight
BTW I think it would be nice if difficulty levels would give AI extra resources and units on weekly/daily basis (maybe even extra experience for heroes) instead of changing starting resources.