Apparently there is also a "Mania" difficulty but you can't play that until you've beaten the game once, which is probably a good thing for me or i might have been tempted to try it :)
Like Tales of Destiny and presumably the other Tales games combat is real time. You control the main character and play the game pretty much like a fighter. You can have up to three other people join in for the battles, each controlling a different character, otherwise they're all controled by the computer with a medium complex set of rules you can set controlling their behavior.
I did a quick check of faqs before starting the game, as i am wont to do, in order to see if there's anything i need to worry about missing permenately as i go through it. I found two "Completion" faqs and learned that it is impossible to get _everything_ without going through the game at least three times, which is both a good and a bad thing.
The main thing you need to collect in the game is "titles," which are slightly similar to classes in job-based RPGs. They don't change what you can do but they do affect your stat changes when you level up. The default title for every character (or at least all the starting characters) doesn't gain you stat boosts at all except for HP and MP. The very first title i got was for looking at a person shaped hole in the wall, which upon hearing the story of how it got there earned one of my secondary characters the title "Klutz," which gives bonuses to HP, Str, and Acc.
Of course this means that early leveling isn't going to be effective as later leveling, at least the first time through. Given the "takes three times to get everything" bit i have to assume that you keep your titles for any "New Game+" type games, which makes me wonder if picking hard at this point might not have been a mistake =P Especially since i'm also trying to get a couple of the "Avoidance Titles," including "Eternal Apprentice" which means that i can't unequip the main character's starting weapon until a certain point, "I Hate Gels!" which means don't use Gels (the main healing item) in battle up until a certain point, and "Friendship First" which means no one dies in battle up until a certain point. The FAQ says that it seems to be okay to use Gels outside of battle, and at the rate things are going i may have to start "cheating" pretty soon and do that. Or i may have to see if the setting for the battle dificulty can actually be changed in the middle of the game the way the system menu seems to indicate.
So far i've had to reset numerous times due to deaths in battle, though i managed to just barely scrape through the first quasi-boss battle, though that ended with two or three people before below 10 HP. I was very frustrated that the AI has no setting for "stay the hell away from the enemy." There's a "hold position" setting but that doesn't work if the enemy advances on them. There is a "use long range attacks/magic only," but i was afraid to try that because the critically injured AI characters had no long range attacks and no MP left for long range spells/skills =P