What determines the power levels of the different Daedric Princes? Is it the amount of followers?
I've heard a lot of people say that all the Daedra are equal, but I seem to remember that Jyggalag got cursed to become Sheogorath, because the other Daedra were jealous / fearful of his power?
It really depends on what sort of power you're talking about. Power over Tamriel is determined mostly by the number and quality of your followers, since you need followers if you want to operate in the mundus. Power in Oblivion is probably determined by how influential you are. The princes are all in complete control of their domains. It is only through wit, manipulation, trickery, or influence that you could adversely affect a prince. Think of how Lorkhan harmed the other et'Ada - by tricking (or convincing) them to put into motion a plan that killed themselves. That's the way you harm great spirits - by getting them to harm themselves.