Does anyone know how to change AI difficulty settings in the multiplayer set up?

I cant seem to move it from noble. Also does anyone know what 'allow permanent allicances means'? i.e. will the computer actually make permanent allicances in the game or do you have to set it in the setup?

Thanks.

Yeah, I would really like to know this too. Me and a friend of mine play this game with the 2 of us plus a load of AI's. But they are no match for us on the noble level. Is there anyway to, instead of penalise us with higher difficulty level, help the AI's by setting them on monarch or prince or whatever...