I'm planning on making a scenario with some units that are "Internal Defense" only. ie they are wheeled and all terrain is 'Impassable to wheeled'.

I'm wondering if anyone else had some experience with how the AI would handle these type of units

Since they would be better than the 'fully mobile' defenders, would the AI only build them? [they would also be better than 'fully mobile' attackers but would be flagged with a defensive AI strategy]

OR would the AI try to use them as escorts with an invasion/colonization thus stopping the AI from invading/colonizing (even when other mobile defenders were available)

Any examples of how the AI handled a 'highly movement restricted' terrain for some of its military units would be useful

It would be much simpler to make the units Immobile.

The AI handles immobile defenders just fine (as long as they don't have the Load order; if they have it, the game will crash if they try to load one into a ship). I'm not sure how it would handle your setup.

I heard immobile ground units make the game slower
As for wheeled units, I added forests, jungles and desert to the list of terrains impassable by wheeled units. Works fine, but I think the AI ignores this when choosing which units to build, they just know they cant cross those terrains when they try to move.

I heard immobile ground units make the game slower

I've not run any tests, but any effect must be small. MrBlack's Iran-Iraq War scen uses immobile units on a massive scale, yet plays very fast. ACW also plays pretty fast, and has plenty of immobile units.

It seems an interesting idea. I think the only way to know what would happen would be to try it and see. As far as I know, the AI *does* build units that are not its best available, so having these units would not necessarily mean the AI would stop building the slightly inferior units that could leave its territory. But I suspect it would not be able to build the right proportions of each or plan ahead.

Thanks, especially about the Immobiles, that was another thing I was thinking about, but figured that would be one more level of complication. (especially since the Internal Defense units would also be made for a high attack, ie counter attack along 'railroads')

Ah, stupid me, I wasn't thinking about roads and RRs. Well, as Plotinus says, you probably simply ahve to test it.

Any examples of how the AI handled a 'highly movement restricted' terrain for some of its military units would be useful

I've made most of my units Wheeled and it doesn't seem to affect how many of them the AI builds. I still see a good mix of all types, not just those few that can still cross all terrain. In fact, I'd say it builds more of those units that are Wheeled.