So how different is this than battlechess?

I've never played Battle Chess, but I picked up Combat Chess quite a number of years ago. It was great at first, but it's ultimately just animated chess with some decent background music.

as i can see with the screenshots, Combat chess has much nicer renders.
and Davidheinemann pointed out combat chess has music, battle chess does not.
But on the other hand Battlechess rooks where Golems, you cant beat that :)

Was there a difference in difficulty?

I don't remember much about Combat Chess' difficulty. Even if I did, I haven't played Battle Chess, so I have nothing to compare it to, I'm afraid.

I never played Battle Chess but in this game you have two difficulty sliders - 'overall difficulty' and 'number of computer errors' - with 10 or 11 levels to set.
Im seasonal/weak chess player (~1300ELO) and with disabled 'computer errors' i was able to win most of my games against 3rd level - and i hit the wall at 4th level (i win 1 game for every 3/4 played). I cant measure higher level of difficulties and i never tried to pit this program against another. But i feel that with my speed of improvement this game will keep me company for a long time :p.