Does anyone know what the difficulty settings actually chnge and what were are the difficulties that reflect the original uk version?

Apparently, the UK version just allows your inventory items to be automatically selected when you switch to easy mode.

As for the USA version, which I didn't even know about, I found this:

"There are two versions of ROTH as far as I am aware: a UK (European) and a USA version. I originally bought and played the UK version (back in '96), I recently purchased the USA version from eBay (UK). The USA version allows you to use your mouse to pan your view (up, down, left and right -- in the style of most modern 1st person shooters). The USA version also allows you set the 'arcade' difficulty (4 levels) as well as the 'adventure' difficulty (2 levels). The UK version only has a 2 global levels (easy or hard). Your UK save games are NOT compatible with the USA save games!"