I didn't have any audio or visual problems with the Xbox version. Nor did I have any slowdowns, though it did freeze a couple times (after the Xbox had been on for 8 or 10 hours). I also had clipping problems 3 times (in the original release of Ego Draconis) Rush Attacking up or down hill, but had recent saves, so it was easy enough to reload (one time I tried just moving in what was the down hill direction, and popped back above ground, but reloaded to be on the safe side, since my last save was a few seconds previous - saved before reading a book on a pedestal then Rush Attacked the creature that summoned).
The difficulty level effects health/mana, which indirectly does effect the behaviour of some opponents (ie the spells mages can use).
If you are getting one hit killed, you need to either try a different location first, or check your character build. The game doesn't hold your hand and tell you exactly what to do, but if you start having trouble, and a change of tactics or different approach is not enough to help, then there should be other quests you can do or areas to explore.
Playing on nightmare with a ranger, I stopped distributing stat points after level 15 to keep the game challenging. Another playing a summoner type build on nightmare didn't wear a breastplate or helmet and stopped distributing stat points on level 12 or 13.
Welcome to the forum.
