What's the difference between the difficulty levels?

[Booyah]

Can someone explain what's the difference between easy, normal and hard?

Also, you can choose the difficulty level from options as well. Is it the same thing?

[Gorla]

The difficulty levels have different multipliers, this is how the difficulty.ini file looks like (you need the modding tool to open it):

[Difficulty_0]
{
DAMAGE = 2
HP = 2
RP = 1.3
TAX = 2.5
}
[Difficulty_1]
{
DAMAGE = 1.3
HP = 1.3
RP = 1.1
TAX = 1.5
}
[Difficulty_2]
{
DAMAGE = 1
HP = 1
RP = 1
TAX = 1
}
[AI]
{
DAMAGE = 1
HP = 1
RP = 1
TAX = 1
}

On easy level you get 2x power on every unit, 2x health points on every unit, 1.3x more research points from missions and random events if enabled, 2.5x tax from planets.
This can be changed during the game, so starting at hard and later switching to easy you will see that your units' hp will be at "half" because you just doubled the total hp. The tax change also easily visible.

[Booyah]

Oh, so hard is besically "normal". You're under the same rules as AI.

Thanks!

[silverspeed]

I was testing game difficulty levels a bit. I did't spot it till yesterday:
Tax 'value' changes between levels. For example when the war between Mars and Earth is over and you need to colonize a new planet-> I chose Alpha System and the next tax numbers came up:
Easy: 28 Credit
Normal: 17 Credit
Hard: 11 Credit

I also spotted an extra income called "others" in Easy ( it was a temporary thing, maybe my first 30 mins gameplay) when I was going to beat Kariak Empire. So yeah, in some missions you get some extra income until you stabilize your income.

In general, I don't think AI does anything different on normal or hard level. Your gameplay is getting harder by other factors reduction.

Update:
I was reading an article (magazine from 2002). The project leader shared 4 page details about this game. He said they made AI hands limited on Easy and Normal, also the player (you) gain much more bonus than AI.
He said that Hard level is where there is no limitation on AI and you better off not giving much freedom/time to AI otherwise you easily find yourself behind on every possible measures.