If you want the neutrals to be worthwhile opponents rather than conquer-fodder, play proportions. The economic emphasis on the homeworld means that it is far harder to out-pace and overwhelm them. Also, the fact that they keep all their ships in the home system means that their homeworlds are often better defended than those of other races.
Place new neutral races in the "neutral races" folder...otherwise...unless I am mistaken...they will be treated as full fledged races. and we can't have that now can we?