I enjoy a challenge, and it is not uncommon for me to play games on hard. That being said, I only enjoy a challenge if it consists of what I consider "true" difficulty.

True difficulty: The game gives you a realistic chance of actually finishing something on the first try. It might be incredibly hard, but it won't throw a death trap at you that you can't predict, or a puzzle that is just down to dumb luck, so a person skilled enough could realistically beat the game without dying.

False difficulty: The game throws random stuff at you that you can't realistically be expected to predict, thus resulting in trial & error gameplay. If I get shot by a sniper that I could not have seen, fall down a hole because what looked like solid ground turned out not to be that or end up having to beat a puzzle that the game has given me no real hints about, I'll just end up being frustrated.

I enjoy a challenge but I do not want gaming to devolve into being an exercise into masochism. I loved 'hard' games like far cry(it lacked drive) or dmc 3 (not the se) so long as the gameplay is interesting.

It depends. I never felt that e.g. space and flight combat simulations should have the ability to save/load the game any time during the mission, so that you could backtrack to just before you were blown to smithereens.

But in games where I want to explore and try out different things, save-anywhere is pretty much a necessity for me. I want to try in Tomb Raider whether it is possible to jump to that far away ledge, without having to replay the level from the previous save game point in case it was a judgement error. If it doesn't have that, I don't really want to try anything special.

For e.g. Far Cry, I think save-anywhere is quite important because it practically has lots of instant death parts, with those enemy snipers and all. While it is theoretically possible to scan all enemies from afar, you will still miss a few every now and then.

Halo 2 didn't have save anywhere, hence I felt it was very unfair the enemy snipers could kill you with one headshot. In Far Cry (using the console workaround for save-anywhere), I don't mind them, in fact I feel they should be able to kill me instantly, because I can do the same to them..

I think that the only hard game that I enjoy is La-Mulana. Dark Souls isn't doing much for me so far, despite the large number of people who praise it.

It's a balance between challenge and frustration. A challenge can be frustrating, but if it is fair and the reward is worthwhile or the time spent overcoming the challenge fun, then that's great. Where I draw that line will depend on the game type and sometimes what side of the bed I woke up on. I also think games that allow you to fine tune the difficult or realism (like flight sims or space sims often do) have the right idea. Of course that can lead to a confusing and intimidating list of toggles, bars, switches, and knobs for a difficulty menu if one takes it too far. But in general I like being able to set the degree and type of my challenge in the game while retaining the game's overall play-style.

It may exist although it won't be a clear distinction:

Genuine-challenge: Gives you a chance of winning if you either think strategically (strategy games) or react skillfull (action games) ... the chance of winning strongly depends on your abilities. Requires creative or elaborate thinking. Finally: makes fun (although this is subjective).

Sadistic-and-unfair: Adapts the gameplay in such a way that the chance of winning is always low, whatever you do. Doesn't require creative thinking and mostly rely on repetitions.

It depends. A fair challenge is good. But games that are difficult to play because they are overloaded with
functions ....uuuuhhhh.
I don't like games with scripted difficult, like racing games were you can't see your opponents in the mirror and
the next second they are in front of you. One of the frustrating games ever was Might and Magic.
There was not one easy fight. No problem just a little leveling and they are history .... no they level to ;.)
Even after i altered my savegame in one with ultimate characters they did the same (ever fought against
around 3 thousands opponents with your party?)

The problem with games that don't have scripted difficulty is that they can become too easy. For instance, in FF10, I took a break from the regular game to beat all of the bosses in the arena. After that, the final boss looked at funny me and fell over dead.

I would say there's a difference between challenging and just plain hard/contrary for the sake of it.

But a lot of games have way too much "help" these days. I recently got Dungeon Siege 3, and though there's no "magical arrow", if you can't figure out where you're going from the mini-map you can press a button and some golden spheres will pop up temporarily to point you in the right direction. Talk about removing the fourth wall. (edit: of course, I realize the same could be said about the mini-map)

I think what is "challenging" these days has been artificially inflated - too many games have designs that remove too much of the thinking/planning/figuring it out for yourself thing, so there's no real room between "This game will guide you every step of the way" and "This game will kill you before you take your first step."

And thats why balancing the difficulty is so hard.
But than again some games can do it.....you just get less and less EP for enemies till you go to the next location.

How many times i've (my Avatar) died in the original Prince of Persia but with the right timing ......

I just choose the hardest (or second hardest in some cases, DOOM 1 & 2, Serious Sam's), and play.
I don't like autosaving. I don't use quicksaving.
If the game does not have autosaving, I save at the end/begining of a level just in case I would want to repeat a great one or whenever I stop playing (mostly). If there is autosaving I only save when I stop playing.
I do not support faked difficulty if it feels stupid. Endless illogical waves or insane enemy health.

I wish I could turn off autosaving in every game. It just corrupts the experience. Start of game, you look around, SAVED (you might hurt yourself from looking around), then you start moving, SAVED (small stone on ground, you might trip), you succesfully pass the stone and end of level, SAVED. 100000 points for completion and 10000 experience for not triping on rock and 20 achievements. Whooo, I feel exhausted, I think I need a break since this game is so hard.
Can't wait to see what next 10 years will bring :(

Can't say where the line is, but I've never seen a game that'd be too easy. Or too short.
Seen plenty where the difficulty comes in the way of enjoyment.

Mostly I hate artificial difficulty, where the developers can't be bothered to make smart or creative opponents,
instead giving them lots of health or toss in hordes of them.

Computer chess is probably the only case where I get my ass handed to me fair and square.
Artificial would be where the computer gets fresh pawns all the way through, or could move in new ways.

Will you believe me if I tell you I had encountered such a chess game on an old Macintosh? Only 2 times have we (me and my father) managed to get it to a position where we could checkmate the AI, first time it captured its own rook, second time the king moved to the 9th row, to return when the 8th row was no longer threatened. So yes, even chess can cheat :(

Whoever came up with that remote-controlled mini-helicopter mission in GTA: Vice City should be hanged.

Yea, VIce CIty and San Andreas had some frustrating moments. The new ones as well.
I'd choose "easy" in a heartbeat if I could.

And Chess as well. I'll be. :/