For good difficulty levels, check out Crysis. On easy, you'll see little arrows pointing at where the grenades people throw at you are and the North Koreans speak English. On hard, the grenades land silently by your feet, you have no cross hair (which is awesome!) and you won't understand a word any enemy says.
Much better than just having difficulty level easy = 1, normal = 2, hard = 3, enemy hitpoints = difficulty level * 1000.