Bit of a bug: All troop types are unlocked as soon as the settlement is created (limited by potential recruits, of course). I'm guessing they were suppose to be limited by knowledge/buildings?
Well, I'll just enjoy recruiting the occasional knight at 10 gold until this bug is fixed...
Also: I'd suggest a somewhat more detailed promotion track for the custom units. For the more basic troops (peasants, warriors), it would probably represent battle salvage. So for instance, elite peasants would have swords and metal armor among their possible equipment, along with all the basic peasant crap. Thus, some elite peasants would field better weapons and armor, but many wouldn't, as it would be random.
For the more elite troops, such as knights, two distinct trees might be fun, such as Dawn Knights (Maces/hammers, shields, and platemail) and Dark Knights (standard knight equips plus crossbows guaranteed).
Of course, it's a balance between letting the custom troops get better while still keeping the settlement troops distinct by knowledge/building.
Bug: Settlers are broken. I can create them easy enough, but I can't add them back to a settlement. Keep getting "No settlers in party". Even though I got the troop type settler from another settlement, and they have the right name and all.