Yes and yes. Entrenchement adds a huge new element to the game and costs about $10/£6.50. The AI often gets high level capital ships, but doesn't use the level 6 ability. The AI has generaly improved since the basic Sins release, and the increase at Entrenchement does provide for a better gameplay experience (they caputure neutral strutures, avoid your mines/static defences etc.)
If you liked it when it was released, but thought it could do with a bit of work, then you'll surely like the new version!