The whole problem with making tactical combat "optional" is, again, the issue of balance. In almost every game where this is possible you will do better by playing out a battle in tactical combat then by letting the AI auto-manage it. There isn't always a huge difference, but playing out any battle not overwhelmingly stacked in your favor is usually the correct choice, which means that it's not really so "optional" after all.

I think that making it a game setup option would address that concern.  That way, those who didn't want it could just let the AI run the fights for the whole game the way it does in GC2.

another problem I have with implementing tactical battles, is that because they happen on a 2d map/plane, even if the battles are automatically fought, it will be on a 2d plane and we will lose the cool 3D combat viewer battles.  It will be like watching a checkers game play itself out.

Thing is, though, right now we have no choice but to let the AI do it. If there is an option, then without a lot of effort balancing things - effort I'd rather have devoted to other parts of the game - then letting the AI do it will rarely be a good idea. Again, why I feel like it won't be that much of an "option" at all.

It's different now though, because there aren't any tactical battles.  So the AI is much better at accurately calculating who would win just based on numbers.  The combat we watch in GC2 is just cosmetic (which is fine by me).

Why not clone Gratuitous Space Battles for use as the space combat engine? (Yes I realise it's been suggested before). In GSB, you can set policies for your fleet before you begin (to tell damaged ships to fall back, or for ships to shoot the same target at once, fighters to stay close or chase etc) but you have no control once the battle begins. You just watch. If you don't want to watch, I'm sure that a modern PC could accelerate a GSB-style battle so it takes place in a few microseconds!

I've only been playing GalCiv2 for a couple of days. But already something I miss from MoO2 was being able to specify different mounting options for my ship's weapons. Deciding whether to have five heavy-mount forward-arc laser cannons, or just four in larger 360° mounts, added richness to ship design in MoO2. It didn't matter that the graphics were completely symbolic, a fixed bitmap sprite whose weapons always fired from the exact centrepoint.

As for the AI being intimidated by your stack of basic fighters - a more advanced system of evaluating strength would be needed. The AI should ask itself 'Who would win in a fight - one of my navy's fleets vs the other player's fleet?'. This would mean the AI evaluating what of its own ships and its opponent's ships are likely to meet in battle, then run a simulated accelerated GSB-style battle a few times to see who's likely to win. This happening silently, in the background, as fast as the processor can do it. If it discovers that your typical navy unit of a fleet of small fighters can consistently evade the anti-capital-ship turbolasers of its typical cruisers in a GSB-style battle, then a) it should recognise your military strength in diplomacy and b ) it should try to provide defence against your known technology as it updates its fleet. You could have the same AI on your side, as your military aide.

As for ship design - I can't remember if this is in GSB or not (I didn't play that game for very long) - but using the Metaverse, it should be possible for successful player-created ship designs (and fleet strategies, if GSB-style battles are implemented) to be propagated across the Metaverse to be used by the AI in other player's games. By design, I mean weapon and module configuration, not the visual model, and the set of tactics chosen in a GSB-style battle. Amongst other things, this would be a great incentive to own a legitimate copy of the game so you can connect with the Metaverse and have more challenging opponents than a statically-generated AI can provide! 

edit:  I hate smilies. 

Wow was going to post this exact same thing...GalCiv2 was disappointing in that there was no tactical battle.  I saw a few posts that GalCiv2 was just battling spreadsheets, which I hate to admit was true. Just to support the above, a Gratuitous Space Battles as a tactical battle would be great. Don’t care if it’s AI run or player controlled units (like a dragon age origins in space).

As long as the AI knows what it's doing when it's giving orders.  Otherwise humans will find all sorts of ways to exploit the AI behaviour that weren't there before.

And this is why I tend to be against the idea. The Twilight AI, bugs aside, is still probably the best I've ever seen for this genre of game - yet people can still obviously find exploits in it. A tactical combat AI, assuming that it didn't dominate the game (which would be bad itself) would likely have even more weaknesses to abuse, which is why the idea of optional tactical combat doesn't really work: for any sufficiently skilled human player, choosing not to fight out the battle yourself would always be the sub-optimal option.

I just want to be able to tell my ships what to attack, so if your outnumbered, you can actually take a couple enemy ships out, instead of just putting each one at half health.

Oh and like have a couple different modules that you can switch power to eg. Reroute engine power(maneuverability drops), full power to shields(def up)/weapons(atk up) or any combination of those. Including this, they should have it so your manuverabilty affects your hit/miss.

Oh and reinforcements, if you have fleets beside each other, but the time for them to get to the fight is dependent on their engine power. As in better engines, quicker they can join the battle. Or make it tech based. like reinforcements 1 lets you get a couple ships from a fleet, the next tech a few more, the last one the whole fleet kinda thing.

Yeah it is actually a bit of a pain how you need to manually keep another fleet on top of your damaged ships while you're escorting them home.  if you just leave them in the same fleet they are the first to get targeted.

Now you could argue that ships are fairly expendable and that you can always build more, but when all it would take is a few weeks of repairs to get them to full HP and back in the fight, it seems silly.

Is there any confirmation that there will be a GC III? I thought there wasn't going to be one. Is this just wishfull tinking?

For me I would like the option. In the begining when there is a few ships I love having tactical combat, then later I like to use the "auto" button. Why can't we have both? Why do people who who don't like tactical combat say we can't have it? You don't have to use it if you don't want to, that is why it's great to have Options.

I liked what they did for Star Trek Birth of the Federation. You have a bit of control, by telling the fleet what to do, Assault, Flank etc etc, or hit the Auto button. I miss that feature and think it would be nice to have in GC III if there is going to be one.

My thoughts on tactical combat is this... 

In the current implementation, ship design and combat are based upon a "rock, paper, scissors" concept.  It is simple.  Too simple in my book.  To me, the fun of designing ships is to design them around a theme and a style of combat.  Do I design missile wave type ships that fire a wave of missiles to soften up the opposing fleet then follow them in to finish off the wounded ships.  Or do I build a few heavily armored dreadnoughts that literally plow into a opposing fleet, hiding behind several feet of armor and shields to blast the enemy a close range with a mauler type weapon.   Perhaps escort type ships that fire a barrage of missiles to cover the retreat of the ships they are guarding.  

The point is, that not having some sort of tactical battles takes away many of the options for designing ships and some of the fun.

By the same token, even when I have the option of tactical battles, I don't want to always fight them.  If the battle is hugely one-sided, I prefer an auto-resolve function so I can skip that battle and move on to one where my tactical genius can sway the battle in my favor.

I've never played GSB, but from what I've read, I do like the basic concept.  Design your ships and establish a formation and basic battle plan, and let them go.  It is in keeping with the "strategic" model of the game and I wouldn't think it would be that hard for the AI to handle.   Code into the AI game a number of default ship designs and roles and some tactical plans to utilize them.  Civs can choose from them randomly or based on the development of key technologies (hard to have a missile wave with out missile tech).