AI is very important in my eyes too. A good example is GT3. Damn good graphics (though not as good as GT:Concept), very good physics (very important in a driving sim), but the AI sucks. I can beat a much more capable car than mine. They make up for lack of AI with a bit of tuning instead. Annoying when you stick to a none tuned race car and they go and cheat, by having more straight line speed. There is more to the AI than just good driving. It would be much better if there was some AI in the setup of the car too. Very complicated, but worth it.
AI should be a major part of games now, but it is lagging behind physics. I like games with the most realistic physics, but AI seems to be strapped onto the game at the last second in many cases. Hopefully in the case of GT, GT4 will fix that. I HOPE! :-)
One annoying thing in some strategy games (and others) is computer player which has abilities which you know are only there to make up for the lack of AI. I like equal opportunities! Yes I know the computer will in a lot of games have abilities you can`t have, cause thats the game, but in the case of Dune II they can build on top of your units. THATS NOT FAIR! :-)