1, 2, 3 does not refer to the tech level start. It is simply that you can set three different stages. Say, build no bigger than LC for the first twenty turns. No bigger than BB for the first forty turns and so on. Technology level has no impact on this.
Thanks to you all for your help.
While you're in such a helpful mode could you
enlighten me on why most of the files I've seen
in mods only have the AI defending 3 systems at
any time.
Is it that to ask more would be too much for it?
...and is there a limit to the %ships to be used
for defence in AI_Fleets? Can this be set lower?
The AI is not very good at anything. If it is set to defend a lot of systems, it will spread its defenses too thinly, and they will not be strong enough to have an effect. Better to adequately defend three systmes than to poorly defend 10.
PBW is a much better way to play se4. Human opponents are almost always better than the AIs.