Normal >>> Hard is tougher than Hard >>> Lunatic.
Normal still allows you to do completely moronic stuff all the time and get away with it without even noticing you were playing very, very badly, since there's room and time to twitch your way out of any trouble you can get into; hard is where you start being punished harshly and repeatedly for doing things without thinking, forcing you to either understand the game or always fail without really knowing why. Lunatic is, most of the time, just a bigger, badder, faster hard; you already know the game by then, it's just a matter of refining your abilities.