What is the default harvester income? From what I've read online, it was 6, then it was boosted to 12. When I play it seems to be 20. Is that a mistake? Should I have less?
That sounds right -- it's been changed many times, and that sounds like the correct value for a mark I harvester.
As for the other thing, I originally thought I had "1." Apparently somehow I accidentally gave myself a -20% handicap when I meant for it to be 0%. However even if default income were 6, -20% would not reduce my income to 1! Is this bugged? If it is and I give the AI a negative handicap, just how badly are they really being penalized? (Which is doubly tough for a beginner such as myself to understand since they don't collect metal and crystal.) Positive handicaps seemed to work correctly, though (Assuming 20 is the default.)
It's possible that there is a bug there with the negative handicaps for player income -- almost nobody uses those, and so it's quite possible a bug of that sort crept in over time. People tend to do negative handicaps for the AI, or positive handicaps for players or the AI, but negative for the human side just isn't much fun.
In terms of the AI, they are penalized in their reinforcement points, their wave sizes, etc, at the percentages that you'd expect. That should be working just fine, as many more people use that. I'd suggest, if you're newish, to avoid handicaps all together, though, and just set the AI difficulty at a level you're comfortable with -- 5 or 6, if 7's giving you trouble, etc.
Hope that helps!