As many of you know, I like to give visual demonstrations of this stuff, since there's a lot different micromanagement tactics you can use to trick the CPU to fool them into losing, because that's really the only way you can beat them, like DreemerNJ's example of the jump back, teleport, containment method.
Specifically, I would say Liu Kang is pretty tough to beat the game with on par with the other characters since on average his combos do the least damage, he has no containment move, and an overall awkwardness, however, I put together a couple of vids, one showing how to beat Jade with Liu Kang since these tactics can be used with any character vs her, including Smoke and add with this his harpoon, combos, jump back and kick teleport, and also, beating endurance, which took me the full three rounds and pretty down to the wire, even though I never really play the game with Liu Kang ever if I am just playing for "target practice" so here goes:
Liu Kang Endurance Example Liu Kang Vs Jade Example Pretty much that can answer anyone's gripes about UMK3's AI. As far as MK1 goes, I really can't help you with that other than I know there is a method of stepping back and jump kicking, which will pretty much give you a free jump kick everytime.
Matt