I use peasants often now when fighting Dark Knights because the HOLD POSITION command gives them a chance to kill a few of the enemy and me the opportunity to either shoot or battleaxe more than a few by myself.
The mass of peasants allows them at least a chance they don't get when we charge or are dispersed; they still need the help of my hero and even then, we'll win only if the hero's strong enough and we get a little lucky.
(Battle difficulty settings all at highest, no tricks or exploiting the AI by going up an impassable hill and waiting for their suicidal gathering below. )
This type situation - infantry vs cavalry - is one of the few that makes me wish for some elementary formations or group control so that I could at least organize a quick skirmish line or battle square.
So while the dozens of formation suggestions made over the last few months have usually seemed more appropriate for commanders of thousands of troops fighting an organized planned battle than for a leader of two dozen warriors engaged in random, spontaneous encounters, some initial formations don't seem out of place.
Once the every-man-for-himself fighting sets in, I can see the chaos of melee combat would be very unlikely to allow any further formaton orders, but at battle start, I would like those peasants to a least form a hedgehog, line or hollow square. Better trained troops would be capable of more.
If morale were included in combat, then I think peasants would become a distinct liability because (I assume) their lower morale would cause them to break and run for their lives rather than fight experienced soldiers. One could start a battle only at the risk of having your entire warparty head for the hills if there are not enough professional troops to encourage the peasants.