OldFatGuy: I dunno, I'm scared of upping it to hard, because if that makes the ending too hard I'm going to be frustrated having just now played another game all the way through to find it impossible to beat the end (Divine Divinity). But, at the same time, I do feel myself getting bored now because it's just so easy. One hit and they're dead, and quite often one hit and more than one are dead. In fact, one time I killed THREE on one hit. And I don't even have the Deadly Pirouette skill.
I played on Hard and enjoyed it. I found the early game was the hardest, and things got easier later. If you're good at dodging bears you should be OK on Hard, but I definitely died a lot in the beginning... I also learned that some places were just too tough and I would come back to them later. If you want to try it, just keep your current Medium save game so if you think Hard is too tough you can just go back.
If you play on Hard, make sure to use Alchemy. There are certain ingredients that will give you permanent stat boosts which REALLY help. This becomes very important when you move south. Also, it's probably a good idea to do the first few parts of the main quest early, as you'll get a good chunk of experience for that. Then you can explore the northern part of the map without as much trouble.
Also in the early game I would sometimes lure enemies to a mana shrine, so I could keep casting heal on myself while fighting. That made some of the tough early fights easier.
Whether you decide to start over or not, I recommend playing farther into the game. The northern part of the map is all pretty similar-looking, with mountains, some snow, and wolves, but once you head south there are some really cool environments like a bamboo forest, misty swamps, and a full-fledged desert to explore. And there are new enemy types to match.
The only criticism I had of the late game was that I eventually ran out of loot to find. That made the game pretty boring, but fortunately I was able to head straight to the end at that point.