I just started a game of Diablo 3 on my PS3 and saw that I had the option of Easy, Medium, or Hard difficulty. It looked like there were more difficulty levels that could be unlocked, too. What difficulty levels exist and what specific effect do they have in the game? Harder monsters, probably, but how specifically? Does it affect loot at all?
Note that I am NOT talking about he Normal, Nightmare, Hell, and Inferno difficulty levels. This seems to be a difficulty level system that sits to the side of that and which I didn't see on the PC version