Quote Originally Posted by Martok
econ21 is correct. Choosing between Normal and Hard isn't really going to affect how agressive the AI is on the campaign map. It would be different if you were playing on Easy (the AI is generally more passive), but obviously you needn't worry about that in your case.
One thing I have noticed though is that on the Easy difficulty level, there is usually one (sometimes two) factions who are over aggressive, and will take a lot of territory very quickly. It then becomes a match between you and that faction, as very few other factions will even be able to stand against them. I've played in games where factions will get eliminated, usually by the actions of just one faction. Unless you do something early, that aggressive faction will mass alot of troops and alot of ships. You'll likewise need similar resources, or find ways of bringing the faction down. Inquisitors work great against catholic factions.

On the other hand, on the higher difficulties, because more factions tend to be more aggressive, the game is better at keeping things balanced. Fewer factions get eliminated early, and there is more potential for the steamrolling factions to come to a halt, or atleast slow their rate of expansion enough for you to catch up yourself. The only problem with the highest difficulties is that you start out with even less money, and the AI gains boosts in the strategic battles.