Diablo – Solo Wizard Builds

There are a few differences that are known and probably more as well:

1. Higher difficulties mean higher tier loot. Jay Wilson stated that over 70% of all of the armor items in the game cannot even be found in Normal difficulty. So as the difficulty raises so do the armor tiers. One can assume 4 per act totaling 16 tiers. Remember, tiers don't necessarily mean better, just different looking.

2. As the difficulty increases, the boss monsters become more powerful. More specifically, in each difficulty, the monsters gain one more special ability. By Inferno, they can have up to 4 special attributes which can make them very difficult to take down.

3. More obviously, the standard enemies will scale with the difficulty. This video says that monsters scale much like they do in diablo 2. They all have set stats which they carry with them as they level. The monsters also have more awareness and abilities as they scale through the difficulties.

4. Also, you progress through the difficulties, you can upgrade your artisans more through items that drop only in higher difficulties. However, as noted by @Kexlox you can also buy the tomes from the AH and upgrade your Artisans early.

Keep in mind while playing that Normal is made to basically be the tutorial and break you into the game. Experienced D2 players will cut through Normal with ease. As you progress, the game does get very difficult, and you'll be wearing your butt on your head once you reach Inferno. Inferno was basically built to murder you. Jay Wilson stated that they took the hardest difficulty that their testers could handle and agreed was fair and they doubled it.

FROM BRYSONIC'S ANSWER -

The difficulty also scales by having additional players affect monster HP. Monster damage used to scale, but no longer does as of patch 1.0.3.

Note: Because of patch 1.04 monster health per additional player now is not effected by difficulty.

Here is a table showing the amount of scaling that occurs based on the number of players in the game:

This table is now technically useless, but I will leave it here as a placeholder.

          Normal          Nightmare          Hell            Inferno
         ===============  ===============  ===============  ===============  
Players    HP    Damage     HP    Damage     HP    Damage     HP    Damage  
   1      100%    100%     100%    100%     100%    100%     100%    100% 
   2      170%    100%     170%    100%     170%    100%     170%    100% 
   3      240%    100%     240%    100%     240%    100%     240%    100%
   4      310%    100%     310%    100%     310%    100%     310%    100%

If you have limited time to play and will not be online when your friends are, I recommend you play solo, at least for Normal difficulty. As Rachel mentioned, it is just as viable (until you get to very high difficulty), you will get XP and loot at the same pace, and also you may find it more fun:

• You get to play with followers (unavailable in co-op play)
• You can choose your follower and equip/spec them to complement your play style
• Followers have interesting lore and great voice-acting
• Follower AI is likely to be better than most of the random people on Battle.net
• You can complete quests at your own pace
• You can listen to dialogue and watch cinematics without people interrupting them
• Solo gameplay is arguably more tactical and strategic as opposed to mindless click-spamming

Overall I feel that Blizzard has really invested a lot into the RPG elements of this Action-RPG, and if you play solo, you may enjoy them a lot.