Btw, I always start the game on development level 1 (for all races).
The opposing powers would essentially be in too much of an advantage if they started off with better developments.
I find it's much easier to beat the computer if all races start at development level 5, mostly because as you get more technology and make more developments, the harder it is for an AI to handle that (especially one written as badly as BOTF's). Plus, the AI never seems to build some of the strongest ships from certain empires.
My favorite type of game is this:
Small irregular galaxy
Small galaxies are nice for a quick game, unless you like epic. Since the game requires too much micromanagement, I prefer working small.
No minor races
Once you know how to manipulate them, minor races are too much of an advantage, especially if you get the Vulcans and they have class 9 structures capable of cranking out ships really fast. As soon as I'd get a developed minor race, the game was essentially over, which is boring.
Impossible difficulty
The AI just isn't smart enough to win when evenly matched, so you have to let them cheat. In particular, I love how the Federation and the Ferengi can build a monstrous fleet without going into debt.
Development level 1 for all
Unless I'm playing as the Ferengi or the Romulans. For the Romulans, I usually turn the computer to 2 or 3, and for the Ferengi almost always 3. The reason is that the Ferengi are a developmental powerhouse, and they're easily the best race for this type of game. The Romulans have the obvious cloak advantage.
Random events off
Random events in the game are almost always negative and it just becomes more frustrating. I don't need earthquakes, supernovas, embezzling, or class-M planets becoming barren. Plus, getting the Husnock, Crystalline Entity, or Borg just really throws off the balance of power, especially if they show up early.
I typically like playing this type of game as the Klingons as the game continues to be a challenge until you get Battle Cruiser II's. Every game always has this point where you just know that you won't lose, and I love the games where I think I'll lose, but come out ahead. Especially if I lose my home system and manage to take it back somehow.