One thing I've noticed is you have to give the AI a basic unit to build at the beginning of the game. In a normal game of Civ 3 that basic unit is the Warrior. As soon as the computer founds it's first city, it starts to build a defending unit (i.e. the warrior)--it must be programmed to do that automatically. I noticed that if a civ doesn't have a basic unit to build, then it's build qeue stays empty and never builds anything--no units, no improvements, no wonders, not even wealth-- even if it later acquires the tech for a buildable unit. It will still negotiate in diplomacy, declare war (even with no units), do research, trade, etc., but won't build anything.