Originally Posted by
Dhurn
Complete all of Normal -> Nightmare unlocked
Complete all of Nightmare -> Hell unlocked
Complete Hell -> Inferno
It's all the same story/content just with vastly increasing monster toughness per difficulty. Personally I'm hoping for some Inferno-only content to be implemented by it's probably not likely.
Co-op is done through isolated game worlds with a maximum of 4 people per game. Currently they're using a matchmaking system in which you select what quest you're wanting to work on, and then automatically join up with other people on that quest. Alternatively you can start a game on a certain quest and select "open to public" in the main menu and other people will be able to join your game.