SH3 in general is harder on hard than SH2 I think.
I find it can be a bit repetitive and tedious on hard at times but worth the challenge.
I find (just my opinion) that it doesn't up the creep factor by making it hard it just makes it more tense (which is still good).
The original Team Silent often intended the riddles to be the real challenge, something that the teams behind the more recent releases have failed to deliver on.
If you want a real challenge on SH2 or 3 I would recommend you put the riddle level on hard, get ready to loose some hair though as even the guide book or google can't help you because the solutions to a lot of the riddles on hard are randomly generated to keep it challenging for replays. (some of the riddles on hard are REALLY fucking hard)
They get incredibly vague and cryptic.
10 points if you know which bit this is from: To "right" the sins that they hath laid When thrice in falling they intone The Happiness shall be thy own.
haha, took me a while this one, I didn't have internet at the time.