I disagree with this and also take some offense to the comment preceding that. You can piss off with your attitude on "training wheels" Roachor.
The point of the HUD is you are wearing a PipBoy, did you notice you had no HUD while you were in the vault? It is an advanced computer including an area scanner. The various features on the HUD reflect the fact that you are wearing it, so no, turning it off to gimp myself is not IMO a good option.
Also . . . I've seen some users say "VATS" is cheating . . . no, no it is not. You are wearing a PipBoy, and the amount of accuracy and action latency you get in a round of VATS is dependent on your stats. Also your effectiveness in VATS can be boosted by good planning, good tactics, effective use of drugs etc. There was absolutely zero hand-eye-coordination or reaction time in FO1, FO2 and many other classic "tactical RPG games," which have often been turn-based. VATS is a brilliant mechanic that they came up with so that Fallout 3 bridged the gap between FPS "twitch" style game and the older "turn-based" dynamic. It might be less "intense," less dependent on rapid cognition and action, but it is no less dependent on players' effective mastery of game mechanics and then effective action within the frame of those game mechanics. It is no more cheating than is pausing the game or using stimpacks. It may indeed make things easier, but without a character design that is tailored to excel in VATS it will be of diminishing value as one levels.
None of which means that anyone has to use VATS or leave the HUD on or any other specific measure. Play it how you like it. But don't be confused that you should "not use VATS" or "not use the HUD" because they are "cheating" or "using training wheels." If you follow that erroneous line of thinking to its ultimate conclusion then you could say that: "unless you have your screen set far away across the room and the brightness and gamma down so that everything is hard to see you are using training wheels."
I'm now doing a hard playthrough and handling it fine, but the same problems as with Normal exist: as you level EVERYTHING gets easier. Found an explosive hunting rifle. That plus the chems and stats to excel in VATS = "win button" . . . virtually, at least for many engagements. I generally one-shot most mid-tier enemies (with torso shots, not even with head shots) and I'm only level 15. Not that that is necessarily bad, mowing down badguys is quite edifying. But the problem is when the game becomes almost nothing but mowing down enemies and one can do absurd things like sprinting through the whole of downtown just shooting everything in sight and virtually oblivious to risk, sneaking or cover. The problem is that, as you master it, it becomes too predictable and doesn't throw enough curve balls at you. It is perhaps not as noticeable on Hard as on Normal, but it is still there. I understand why Bethesda made it this way: they wanted a popular game, but in terms of replay it undermines now.
My main problem with using damage modifiers for "difficulty" is that it undermines the rest of the immersion. When a baseline enemy needs 6 or 8 direct hit head shots to take it out that is just stupid and very difficult. A civilian human who takes 4 to 6 head shots to kill them with a 10mm pistol at close range is just an unacceptable breach of believability to me.
Regarding the issue of "stuff." I have a profound mixture of feelings on this. I seem to recall that Fallout Wanderer's Edition imposed severe penalties on the availability of stuff and that it was a very effective and satisfying dynamic. Again I can see why Bethesda chose to do it this way for the vanilla game, but the abundance of stuff DOES make it rather easy to build and level up. My one concern is that, it feels like 'finding and collecting' stuff is so essential to the game play, I'm not sure how FOWE style limitations will feel to play.
I have come to the conclusion that I need to do a good bit of play on all the difficulty settings before I embark on trying to create any mods that change the dynamics. Good excuse to play more, at least until GECK comes out!