Some games will give you an xp penalty (eg Baldur's Gate series) when playing on easy difficulty, but the manual says you actually get more experience in this game. Are there any incentives to play on normal or hard dificulty? (Other than the 'challenge') I.e. are any quests locked off, or will some items be unavailable if I play on easy? Or perhaps different endings?
As far as I know, apart from the challenge, you don't receive any special goodies for choosing a harder difficulty. Sorry.
Indeed you get more exp the lower the difficulty level is. Tested this yesterday. Played the start as I always do on easy to Shrouded hills, level 5 and half way to 6. On hard, I wasn't even level 5 even though I did the same things.