Now that you mention it, I haven't seen any particularly tough monsters in my midgame.  I had chalked that up to the fact that I only have Level 2 in Notable Locations currently, but that never stopped them before...

I went through quest level 5 and never fought better than thugs with a few extra hp in the wild.

It wouldn't be good to see bandits with demo forged armor and soul swords is basically what your saying then? Meh.

Whats weird is that my brother played a game on his computer just now and he got to Shrill Lords and Gorroto(1.09p). While no matter what I do monster actually stop spawning late game, and according to your responses this is what normally happens. So there must be a bug in here somewhere......

in the early game the monsters currently work really well imho. while i can see the desire to see more cooler stuff in the late game, often i want to be focussing more on inter-faction warfare by that point, instead of fighting a never ending war with creatures, so i'm not sure how to call it.

ideally, i'd like to see the monsters work as a game balancing factor; the more a faction dominates the others, the more and more powerful monsters it will attract.

I'm having the opposite problem, I am getting swarmed by monsters and had trouble founding a third city.

I had a four hero brigade doing cleanup (and trying to stop them from forming stacks of doom against me) and then got war declared, so I had to try and leave it to designed units.  Biggest problem I have is that designed units are too expensive in technology/resources to help for a long time, I end up using the hero squad for too long.