EDIT: I'm not sure if this is everything, but at the very least I know this:

It affects the health of the player characters. Easy is +50%, I think, Medium is +15%, Hard is -25%. It also affects Chance to hit, but maybe only on Hard. On Hard, players get a -10% chance to hit, and enemies get a +20% chance to hit.

Last edited by Stabbey; 18/06/14 09:59 PM. Reason: clarity