If you think the game looks too hard (I've agreed), remove all Empire Sov's from the list of nations in the game. Empire AI >>>> Kingdom AI.

In the last page of game creation Kingdoms are upper line, Empire in lower line.

I'm doing better now since I'm trying Empire forces, they're just so imbalanced with too much military power compared to the kingdom armies.  Really unfortunate.  But a little easier to have a go at for now. 

I think Pyromancers list of tips is an excellent summary of what you should be doing.

I wanted to add more emphasis to the point that population is completely irreleavnt in this game, getting a good mix of resourece nodes is the key to a good start. Right from turn 1, I start spamming some peasants to go scouting in all directions and figure out where the gold mines, food, materials, libraries, temples, and mines are (in that order of importance) and quickly have pioneers coming behind them escorted by another peasant to grab them before the AI. Getting those resources is key. Getting more than one of the same kind in a city is even better because of how the multipliers work. The only cities you want to be leveling up are the ones with the resources nodes you need more of at the moment so you can apply multipliers to them. Nothing beats a city with 2+ gold mines plus all the multiplier buildings plus taking the +gold% option each time you leveled up the city itself. You'll be rolling in gold with a city like that. The same principle applies to every other resource. Grab what you need early, build some cheap defences to deter the AI, grab some military techs in case they are needed, and you'll quickly have a stronger economy and decent military and the AI should leave you alone. For outpost cities with no resources don't bother leveling them up past level 1 (or maybe 2 if you're rolling in food), don't build any multiplier buildings in them, and there's no rush to build the basic +1 buildings in them either.

A really good strat is to get the briliance spell first thing and zap three cities within the first 20 turns. Then get all areas of study up to level three and start teching your military so that you can get money from the earlier level creatures. Use that money to build more soldiers and continue to tech warfare until you can get blunt weapons and parties of four at training level 2. By that point you are unstoppable and you can just start a new game. If you continue, I like to go after all the resource techs so you know what you are exploring. Then pump out four more cities a good distance from your core cities and go on a bloody rampage against your nearest enemy faction. If you are playing my map, Prirod in the downloadable section, there are alot of heroes you can imbue with essence and then level them into summoners (that means high essence and not much else). The best thing about beasts is that you don't lose anything if they die. Just reconjure them and attack again. This map is so big that you may want a few outposts just to be able to teleport your monsters across the map. I set aside two heroes to be my transportation specialists and let the rest pump out fire demons.

           (fire attack)----------------------->               = sudden acute death.

Any questions?

I probably shouldn't chime in here, as I can tell by reading that most of you are far more experienced powergamers than me, but I also had a sense of overwhelming doom my first several games.  (Many!)  I can only say that the people providing strategies are correct, this doesn't play quite like any other 4x games I've played, and I've played them all.  My first tip is get Heavenfall's bugfix mod, it actually makes offensive spells work, to the point that casters are the heavy hitters in all my armies, and second, the tech tree is key.  I mean, REALLY, REALLY key.  Not just civ or mil or magic, but WHICH tech you choose.  I naturally gravitated towards weapons tech, and had really powerful single units who were getting their butts kicked.  Parties and squads are underemphasized critical techs.  I also recommend 2 mil for every civ for your early game, don't do adventure at all until you have at least three cities, then do the quest tree, not the recruiting or maps tree.  That will make the loot locations pop everywhere.  I fund my Civilization with those things in the early game, and in the late game, monster hunters do the same thing.

Also, as another poster said, starting locations are important, and the game kind of sucks at this, so don't be afraid to quit and restart until you get a good one.  For some reason the game likes to surround you with enemies more often than not, so exploring early and setting up cities at choke points can help you establish territory.

I never declare war on the major factions, usually one of the empire factions will attack me sooner or later, usually sooner.  Often, however, if you can beat off his initial attack (which sometimes won't happen for 10-20 after the declarations) and then immediately counterattack, you can roll up 5-10 enemy cities quickly, as they will have only one defender each.  Don't be afraid to Raze his cities, either, as the AI makes crap cities in lousy spots, often far to many, as well.  (Fortifications tech lets you raze)

As to techs, with military, start with logistics, which gives you parties, (For those who haven't figured out the interface to build those, it's the buttons at the top of the build window, left side party, squad, etc. right side experience)  Don't bother with weapons or armor past leather and the one that gives you the mace, that will hold you until well into mid game, as the game mechanics vastly favor 'Glass Cannons' in the early game.

I also recommend doing the tactical battles, even if they are often tedious.  Using HF's mod, my casters often kill enemy armies before they can close to melee range.  When it comes to spells in the early game, start with flame dart, then hurl boulder, then (maybe) imbue caster, after that, research level 2-3 back to back, so you can get chain lightning and fireball.  These spells are my sixguns, I seldom use anything else, at least until I get a shard, after that, I use whatever matches my shard...  HF's mod makes getting shards have a visible difference in damage, so while sometimes you still only do 6 damage, recasting the same spell at the same target gets you 60 damage second time around, at least once you get your INT above 20...

Wow, this turned into a wall of text, which I really didn't intend, but hopefully some of you who are having a hard time will get SOMETHING useful out of this...

Be aware this is not a powergamer definate win strategy, I still lose sometimes, but I generally enjoy my games, which is what, I assume, we're all looking for...

1.09 is eminently better than the alpha release that you were playing: almost stable, hugely flawed but strangely appealing and with clear potential. The 1.1 beta is out today (no coincidence I suspect); haven't tried it and won't - done my bit as a bug detector. The changes seem to be pointed in the right direction and once 1.1 is out, I plan to give it a shot again. Hardly a definitive answer - but then anyone who is definitive at this point is either a fanboy or a hater blowing smoke.