what does the difficulty setting actually change?

Hello.  What does the difficulty setting actually do?  I've never played this type of game and it is fascinating (and finally, a game that actually tries to push my hardware).  It seems that the AI isn't just smarter as difficulty increases.  It seems that it is able to produce units faster and more efficiently than the player can.  Does the AI have increasing access to information that the player does not?

Thanks.