Strictly speaking, the hard AI doesn't use any better algorithms than the normal AI.  However, in practice the hard AI does end up being smarter.  One of the biggest weaknesses of the normal AI is absolutely atrocious budgeting and resource allocation.  It'll end up screwing up its economy and military.  The hard AI has enough cash flow that it seldom runs into these serious problems and its budgeting (though still leaving much to be desired) is a lot smarter as a result.

I find the hard AI's resource cheat isn't that noticable, so I'd recommend playing against that.  With that said, it does cheat and it's noticable.  However, normal has severe problems and is unlikely to be any difficulty at all if you're already experienced with the game.

Depending on your skill level with RTS games, I suspect it'll be unfair that finally takes you down.  You can beat hard in spite of its resource cheats by sheer attrition.  If you balance your budget and keep your military well honed it's not that hard.  Unfair is where its cheat starts to get... well, unfair.  It'll do things like go fast trade port AND fast heavy while maintaining a large fleet.  Not to say it's unbeatable (anything but, I eat unfairs for breakfast, personally) but if you aren't a rock solid player it's going to be hard to win against that level.

Unfortunately, that's just all that AI offers today.  You can make the AI more difficult by buffing it up with cheats, but it will always be limited to the "strategic capabilities of a toaster".  Certainly there is strategy involved in dealing with a mindless buffed up brute, and I can see how it might be fun, especially if you're with a friend.

However, it's not the same as playing a strategic Sins chess match.  If you want that you have to overcome your fears of being beaten and humiliated and feeling like a noob and play Sins in online multiplayer against real human opponents.  Once you get up to speed against human opponents and see just how radically more strategically challenging human opponents are, you'll probably lose all interest in playing single player against the AI.  It's an almost completely different game.  Online multiplayer also adds many new strategic considerations, such as team play.

I find Unfair easy to beat if you try to go defense from the start and then push forwad bit by bit.

I usually play with Vicious KI, 3 vs 3, me beeing on of them. Thats works. But know tried 2 vs 2 with Vicious as researcher and with the real capital ship mod. That mean muchs more weapon research available.

Let just say its impossible, the enemy will overhelm you with an army not necessary bigger then your own, but at least 1,5 times more efficient thanks to upgrades. And with cruisers where you are happy to have Illus ^^

If there will ever be another Addon, i'd very much like to see a smarter KI without cheating. Who reacts more on my own behauvier, doesn't atack the same undefeatable starbase over and over again and so on..

Yeah, you can beat virtually any AI with this tactic, since they basically don't know how to deal with starbases.  Because of this, I speed-run the AI and measure my success by how quickly I can beat it.  I personally think "par" for a single unfair on the random-small map is 1 hour, and I've gotten victory in 45 minutes as my best time.  You can't do that with an "inching forward" strategy (though you can use a starbase for the killing move when you reach their homeworld).

I'd agree with DS, you're ready for multiplayer if the AI can't stand up to your tactics anymore and you want a more challenging opponent.

Most people do 5v5's online, and we take care to try to split up the teams as fairly as possible.  This means a beginner like you will likely be counterbalanced with a veteran like me or DS on the same team.

This is extremely rare, and really it's a sub-optimal tactic in most scenarios.  It's way more effective to send your ally money so he can build more units rather than sending units to him.  It can take over 10 minutes for your units to travel to his aid, in the meantime leaving you largely defenseless and vulnerable to counter-attack by one of his allies.

That's not to say that 2v1's and 3v1's don't happen, but you usually have plenty of time to see it coming and your allies have lots of ways to help you out.