The better your jousting skill, the more margin for error.
Your lance needs to hit the center of the opponent's shield. Knowing seems to be the problem because no one seems to explain this online. It is actually very easy once you know what you're supposed to do. If you found this thread through google in the future year 2015+, you're welcome! Really, Google gives me no good guides to read. Having spent a few hours playing the game after realising there is very little information to find online, I have worked a few things out.
I grew up with an Amiga 500 but Defender of the Crown is not one of the Cinemaware titles I have played in the past.