What exactly changes in the different difficulty levels?

Any better loot?
Do the mobs get more HP?
Do they fight better?
Do they just hit harder?

Hm i think the enemies make more damage with every level. I recognize that now on the bountiehunt for bandits. They are not really easy anymore.
Well loot they might have a enhanced weapon but not really good ones.

Mostly it just increases enemy Health and damage, the Difficulty settings really should have simply leveled the game ahead of you by X levels instead, that way it'd not only be harder but more rewarding too.

Higher difficulty just means you need to spam more potions

Ty for the replies!

Yeah infinite mana infinite stamina....all the Bethesda usual stuff. They basically are leeling enemies ahead of you by doing this stuff really. More damage more HPS more mana(unlimited).

Well leveling the game ahead of you would not only change the enemy types but also their loot so it'd be a much more worthwhile system, also fighting actual higher level mobs causes you to level like crazy, I made Bleak falls think I was level 50, and ran through it at 4, Tons of challenge and it was very fun until the Scourgelord at the end that I could barely get to Half HP, mind you I had no health potions by then.

But the loot was alot better so I liked it overall.

I think master is so much more fun to play than normal mode. I have rule to save game every 2 mob I killed unless it's boss. If battle is 10min long I quicksave only once when mob half hp.

I have also rule not to use blacksmithing and pickpocket.

Well I'm playing hunter so it could be easier than warrior, but you can't 1 shot anything anymore and I die alot. Not impossible just hard.

If you start playing master be careful which skills you choose, more lvls you get harder it gets. If you lvl up too many skills it will be pritty much from hard to impossible.

I played one character on master difficulty and noticed the following changes:

¤ Tougher enemies (more hp, more damage or equivalent changes to the player)
¤ Higher lvl enemies (I was lvl 5-6 in Bleak Falls Barrow and met a Draugr Death Overlord...

Honestly, the specific details about difficulty are unknown right now because both the instruction manual and the official guides do not offer the information. People assume that it is like FO3, and to some extent that can be seen ingame, but we don't know all the details and won't know them until the CK is released.

Ok yeah I guess, but personally I havent seen any difference in enemies even. I mean foresworn all look like the same naked babarians, and rogues and what not seem to carry the same steel weapons. So I dont think even bumping their levels would make them just give you better loot. As far as this game goes. I hate scaling as well. There should be place you can go to look for a challenge inside the gameworld imo. having the whole thing auto level with you is bad.