Towards the end of the ACKS game, we started to see the deployment of large numbers of mercenaries for hex clearing operations. This wasn't necessarily a problem, and one of my players really wanted his PC to be a 'leader of men', so it was mostly OK barring issues of resolution. We have a decent combat system for combats involving 10 individuals per side in the ACKS core, and a decent system for resolving combats of hundreds per side in the Domains at War preview, but there is not a particularly good way to resolve a battle between 34 pikemen and 57 ratmen. We considered scaling down the DaW rules, but never got to it. There's an order of magnitude range missing in there, which is unfortunate. This meant that my options for fights using mercs were "OK, you win" or "I think you're going to need more mercs." I've no problem with the "OK, you win" approach, but I felt there needed to be a clear cost for using it. The natural and obvious cost is casualties, but determining how many casualties a group of armored L0 men take while engaging a small integer number of 6+ HD monsters was not at all obvious. That the mercs were also cavalry archers further complicated matters of casualty estimation. In the end I ended up dividing combats mostly into "fights which your mercenaries will win with no or minimal casualties" and "fights that your mercenaries will be effectively unable to help you with."
There was, though, in the metagame, definitely a conflict going on with regards to the types of monsters considered acceptable to destroy out-of-hand with mercenaries. I was of the notion that there were certain monsters that took heroes to deal with; the litmus test for me was "Are the PCs and players legitimately afraid of this? Yes? Then the mercs probably are very, very afraid of this." My PCs disagreed, employing mercenaries not only against beastmen and animals, where I was in agreement that they were appropriate, but also against proper monsters, and I felt kind of bad about mostly 'nerfing' their effectiveness for lack of a resolution system. Upon further reflection, though, I realized that there are already several "Protection from Mercenaries" effects in the game. The two that jumped out at me immediately were dragons' frightful presence and the immunity to non-magic weapons of gargoyles and incorporeal undead. The first is effective because it means that low-HD creatures just can't engage a dragon effectively; a L0 man in ACKS flees in panic from a dragon with a fear aura, 100% of the time, no save, and characters of levels 1 through 3 are similarly out of the action. This is a wonderful mercenary-proofing mechanism, and the fact that the penalties for characters higher than 3rd level are minimal suggests that this might be the original intent of the mechanic. Similarly, immunity to non-magical weapons prevents the application of large forces of mercenaries to monsters, since it is effectively impossible to outfit hundreds of mercs with magic weapons unless you have many wizards working on that full time and a huge amount of cash and monster parts to burn. I don't think that this is the original purpose of immunity to non-magic weapons, since we see it on much smaller monsters like gargoyles which are often encountered in low-level dungeoneering settings, but it is a nice bonus. Lycanthrope resistance to non-silver weapons kind of qualifies too; you could buy silver weapons for all of your mercs, but it might be prohibitively expensive (and difficult to do with the equipment availability rules).
I still kind of think that mercs should think twice (ie, check morale) on meeting a 30-foot-long centipede with a giant venomous shark head, or other freaky supernatural monsters that eat villages (since mercs are trained and hired for "military campaigns"), but I do feel less bad about letting them engage and possibly kill such creatures since there is a distinct subset of monsters which is effectively immune to mercenaries. Of course, on a re-read of the morale rules, it looks like we've been playing those wrong too. Mercenaries, henchmen, and monsters are supposed to check morale not just when half of them have been slain or disabled, but also the first time one of them is slain. There is some ambiguity here with what 'slain' means due to ACKS' mortal wounds system; is a merc at -12 HP 'dead' for the purpose of provoking morale? If not, can you postpone morale checks by not seeing to any of your wounded in the field? So there's some weirdness there, but I feel fairly justified in mercs, henchmen, and monsters all checking morale more frequently than we've been having them do.