Once you get the knack of rushing, you can have the AI effectively beaten by the 20 minute mark, then speed things up to x4 to finish things off, so a quick game against the AI will run you 30 minutes or so, not three hours.
It depends what you're doing. 1v1 against the AI is a pretty dull and predictable affair, even with an 'unfair' AI opponent.
No, it's large scale battles where the AI comes into its own. Preferably with multiple enemies teamed up against you 
I'm playing against 7 teamed hard AI at the moment (on the 'implosion' map), and it's getting pretty epic. I'm almost 3hrs game-time in (probably double that for bum-on-seat time since I need to pause often to keep up), and I'm only just now starting my offense, having wrested the first planet away from the enemy. Until now I've been absolutely breaking my back to keep the constant hoards at bay, but starbases are helping enormously
