For all I know "easy" level is for those who just want to enjoy the game itself i.e. questing, unraveling plots, following the storyline. I've been told that at that level combat should not be a great challenge - a little bit more complicated hack and slash :-\. If you want to play at "hard" setting , it's important to remember about preparing yourself for every battle (maximizing your health and mana, choosing right weapon, varying combat styles etc) and taking advantage of every item that falls into your hands (primarily potions, and "grenades"). Otherwise you won't live long enough to tell the tale ;D. Medium difficulty level is somewhere in between, I think.