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Ok I have fought an Imperial fleet and just got crushed.  I think it for the fact that he brought in two battleship in to a 1200 point game with three Crusiers and Firestorms as backup.  I had two Heros, four Merchants and six  Messangers.  The Battleships were of the Emperor and a Retribution classes. 
I need would like some help in taking out these two behemoths for they caused most of the havoc on the board.  He will be one of the few players at my store and he is going to be running this fleet again so the call for help from the Admirals here.  Is my only hope to focus all my fire power on one ship at a time?  Out movering will be difficult with my speed disavange and the amount of Fighter/Bomber he can dish out is frightening.  So some helpful ideas would be nice.

He cheated. He needs 3 cruisers PER battleship. In order to take 2 battleships, he'd have to have 6 cruisers and/or battlecruisers.

http://www.specialist-games.com/battlefleetgothic/assets/lrb/5BFGshipsofgothic.pdf - page 13

Imperial Fleet List - "Capital Ships" - Battleships - You may include up to one Battleship in your fleet for every three cruisers or battlecruisers.

So are Battleships just that much more powerful per point that putting them in this level of a game they can just wipe away all others? Well their 60cm range, 4 shields and 12 hull points... yes they do. I didn't think anything of him taking the extra Battleship just thinking the points are equal so the game should balance out. Now I know better.
But what is a good way of taking out Battleships? Change with everything or just try and Torp them to death?

Hit them with bombers and torps at the same time; his shields don't matter to them, and he has to choose at which to have his turrets shoot. Don't close in; Tau have no close-in advantages, and are actually built toward a ranged advantage.

Overall, though, I'd take a piecemeal approach to taking on his fleet. Kill the faster stuff before it runs up on you, and either disengage (if you've got an enough-better VP total) or snipe the BB until you cripple it, then run rings around it.

On the SG I found a Merchant veriant that have S4 Torps at the cost of losing the grav hooks and Ion Cannons. So should I use it even though I have to use up a Special order to reload with the lose of 2 Ion Cannons per ship? I do get range 40cm Torps with a 45 degree move at the beginning of the phase.

The more torps you can field, the more likely you are to get the hits you need. Also, variable-speed, turning torpedoes are an awesome asset; they negate a lot of what makes torpedoes weak in other fleets. The Ion Cannons, on the other hand, are just lances; to use them against a battleship, you'd have to got within its range, accept its fire back, and work through the shields before doing damage.

With the Tau having little in the shield department I think I will pass with closing on them. Ok thank you for the advice. Should I change my fleet list a little or is it fine the way it is generally speaking?

I'd replace some of those Messengers with Defenders; you don't need that many Tracking Systems, and you give up a lot of potential torp shots. Drop the Messengers to 2 (each on their own, since they can operate independently), and add 4 Defenders. Also, you're limted to 1 Messenger per 500pts. of your fleet, so cutting back makes you legal again. With the 20pts. that saves you, you might be able to shave points elsewhere to get you a few more Defenders, or some Orcas to ride in your grav hooks.

Opps. It did not say that in the stats page so I didn't think anything about it. If that is the case then the Defenders do look nice with Strength 3 WB and 2 Torps.
Lord_Sutekh what fleets do you play or is it just that you know the rules?

Yeah, you have to look at the fleet list in the rules for Tau. It tells you the limits you're working under.

I play Imperial Navy and Chaos, mostly Chaos because I like the better speed and longer-ranged guns.

I just read over the Fleet list and it said that any fleet over 750 you MUST take an Explorer. They are 230 pst! With me not taking Orca at all it is a huge waste. They do have nice Fighter/Bomber ability BUT the three grav hooks and the ONE Shield with a 4+ rear armour.
They Tau design their ships to be modular with all those different bays on each side. They should give use the option of what to put on our ships. Or at the least give us some Ship Design Rules.
IS there anything like that for Imperial or Chaos fleets?

You can take the missile-launching version, which adds another strength-8 salvo. I'd look into taking Orcas as well; they can provide some close support to protect the Explorer against ships that get too close. It's not a ship that is meant to get in-close, like an Imperial BB; it's pretty much just an ordnance platform.  It also replaces one of your Merchant requirements.

The Imperial and Chaos ships are modular, but there's set configurations. No ship-design rules, either. It's just as well; any points-based design system is vulnerable to abuse and overpowered, undercosted results.