What custom faction build have you found that offers the most powerfull ai opponent?

I do not keep as many custom factions around as you do, but anytime I accidentally allow one of them in, it ends up kicking ass all around.  The two that have been a real pain in my last game:

The Elusive Men: Krax/defensive/enchanters/scouts/light plate/lucky - pre-designed lines for elusive troops and deadly archers.  Utterly destroyed three kingdoms before I got to it, and if I had not prepared by developing a fire mage, I would have been destroyed.  As it was, my mage had all the anti-range gear I could get him, and he still went down a few times.  When that happened, it was a party wipe. The elusive line has troops that start at 60+ dodge and go up from there.

The Dreadnauts: Yithril designed for fast research and production, and a mega-fighter sovereign.  Custom juggernauts - high initiative or high armour.  When a juggernaut has 10-20 armor, it's very, very, VERY hard to stop before you get good bows.  And that happens too late in the game to be much good.

Good idea for a post.

In wich difficult are you meant to play? Because things can change a lot...

In general, playing vs my custom sov and the vanilla sov (both same faction), my custom get more Faction Power and faster. It means nothing, anyway. But my custom tarth AI killed Lady Irane in mid-game, while I was still exploring the map (curious: both tarth in war, and close to the rest of factions).

I guess that AI might benefit more from passive traits (like armorer sov, and faction traits like defender, tough and lucky should go fine) than from active traits (I doubt AI can get enough benefit from Beastlord as a player can)

I'm expecting people post here their setups and try them too.

I keep forgetting to check before a new game and have run up against my own factions in the past 4 games - named after myself, my wife and kids.

So far, all of which have been tweaks to the same theme - beastlord, basic air, melee with a bunch of talents (+3 atk, +1 army initiative, +2 mana, -20% magic, brilliant and something else.  Various blood types. 

Empire, master scout, lucky, heroic for all

Invariably - even without being able to adequately use beastlord, my "team" is usually middle of the pack or leading - mostly mid to late game.  Last game I saw my wife and spent the entire early game (starting turn 5ish)  attempting to obliterate her on ridiculous setting.  While I had one city, I found what I thought was her only city.   4 cities later I finally cornered her.

I've made a few custom factions just to spice things up, but I'm not sure the AI can play those custom factions the way they are meant to be played.

For example, I have a custom faction that generates a lot of influence.  It's pretty easy for me to win an Alliance Victory with her.  Unfortunately, she's usually the first one to attack everybody when the AI plays her.

Another example, I have a custom faction that focuses on corrupting shards, death magic, and magic outposts.  When I play this faction, I can generate tons of mana and do bad things with it.  The AI not so much.

So I guess to answer your OP, creating a melee-centric custom faction with bonuses to armor or resistance or quickness or attack where the AI doesn't have to think much is probably the best way to go.

Take a lesson from the Parthians of old ancient times. Hvy Cavalry, Mtd Bowmen, spearmen (counter for cavalry) lightning bolts and fireballs will kick butt everytime unless countered with the same in cavalry strength as the Romans found out. I threw in the lightning bolts and fireballs from Braveheart William Wallace. I've always found range and speed to be the best tactical strategy in just about every wargame or strategy game if you will I've played. of course Artillery plays an important part of those strateties as research allows which would be my lightning and fireballs.

I like games like this that do that an allow the ai to use your custom creations. SPORE also does this and when I encountered my first custom creation I got stomped by it. If only they had done this in Sid Meier's Alpha Centauri.

Any idea which abilities the AI DOES get the most use out of? 

I just made a Trog (berserk, +20lb, juggernauts) Empire - Lucky, Master Scouts, Tough, Warrior Caste, Vulnerable to Magic.  Seems all passive might be the way to go.

At first glance I would think:

AI can possibly abuse Heroic

Master Scouts (ALWAYS useful)

I would say stealth, but seems AI might already have an innate version of it.

Tough

Warrior Caste

Archers

Lucky

Quick

Master Smiths?

Mancer (accuracy), Krax (fortify/8def), Trog (berzerk, jugg), Urxen (+2 atk)

Random note - do Guile and Heroic stack?

Sov Jobs

Adventurer - does it even pay for heroes as it is?  Plus, on higher settings it just has a gross amount of gold anyway.

Armorer - passive, should be useful

Bandit lord - doubt the AI will recruit mobs, useless for human too.

Beastlord - same as above

Diplomat - Doubt the AI doesn't cheat with regards to trade value (my 100 research value vs the AI's 2500), doubt recruits mobs

General - Passive, could be useful

Hunter - meh, figured this was Sov only so kind of useless for both human and AI.

Noble - Doubt AI is impacted much by prestige or even unrest

Summoner - Doubt the AI summons well

Warlock - Passive, could be useful

Warlord - Passive, but doubt the AI cares much about upkeep.

The stuff that the AI plays best with seems to be passive stuff, I agree with you. Not really surprising. +25% defense from the Armor is the must-have. All weapon and armor upgrades seem to go down well - light plate, masterwork chainmail, those Gilden maces.

Any of those for a Trog race with maybe master smiths to really give them an edge.