Quote Originally Posted by Fisherking View Post
Some what better diplomacy...

The difficulty settings only seem to make the AI more aggressive and more stubborn. They may also increase the amount of money the AI gets but I am not sure about that.

Battle difficulties give combat bonuses.
There used to be a list of difficulty level modifiers compiled by Alpaca on twcenter.net, but I have not seen an updated version lately.

The AI definitely gets cash bonuses on harder difficulties; their building costs are lower + they get considerable 'discount' on research costs; also, AI's move points get beefed up quite a bit on higher difficulties.