AFAIK, enemy skill only affects accuracy, and possibly reactionspeed, but not movementbehaviour or when to engage/disengage.
I believe cliff is correct here.
From what I know and have seen, skill only influence how accurately the enemy can shoot.
It has no affect on how "smart" the ai is! In my opinion, the default weapons are WAY WAY WAY too accurate. That or the ai is WAY WAY WAY too accurate. Basically, with 100% skill, the AI will be able to put a bullet in your chest from like 400 meters away with near-perfect accuracy.
This is NOT realistic at all, and makes for firefights that are unrealisitically short. I think that you should almost always put the enemies on 0 skill. That's right, ZERO skill. This makes them a little bit closer to realistic when it comes to shooting in a
combat environment. Note the word combat, which implies that the man is carrying a heavy load, is very tired, is likely scared, and is pumped up on adrenaline. This is not like firing a weapon out on the range, where you can lie there comfortably and only have to watch one piece of paper that isn't firing back.
I do make some exceptions, though:
I give snipers close to full (100%) skill, since they are usually in a position that is more like the firing range described above than the combat zone described above.
Leaders get a little more skill (up to the first notch), because they should be better warriors than their men.
Elite units will get a notch or two more skill than other units.
You should usually give the player's squad at least above 50% skill, because in most missions the enemies FAR outnumber the good guys (which is exactly the opposite of how it is supposed to work in real life). This way they have a fighting chance. But if they get too much skill, they will kill the enemies way to easily, and the result is that you have to put down even more enemies if you want the mission to be a challenge.