The main difference is that higher AI difficulty levels have an income advantage, so they are able to get their hands on better ships and techs earlier than a human player could with the same income rates. There is no difference in the way the AI uses its resources though, so don't expect better tactics when playing against harder AI players.

I am quite sure the income advantages of higher level AI's are as follows:

Hard AI gets a 2x income advantage, Unfair Ai gets a 4x income advantage, Cruel gets a 6x income advantage and Vicious even an 8x income advantage.

I could be mistaken though, maybe the dev's changed changed some stuff in Rebellion.

awww.... cheating ai. thats mildly disappointing. though I guess the only real advantage you can give them in this game.

Cruel and Vicious can also buy more levels on their caps, up to five and six respectively. All AIs starting with the Unfair AI can also buy levels for their titans it seems.

Oh, and those three AIs get an XP bonus when killing your ships.

The agressive AI seems to be the only one that currently builds fleets beyond the titan and 14 caps (and the few odd frigates they have). However sometimes even the other AIs seem to fall out of the picture and spam you with frigates. No idea what triggers that, though...