When starting a new game you have following options:
Choose the dungeon you want to play. Currently there is only one dungeon ("Grimrock") but expansions and user made content will be added here.
Scales monsters damage, speed and aggressiveness in combat. This setting can't be changed after starting the game. Difficulties are: Easy, Normal, Hard
You can use this option to customize the characters of your party instead of playing with the predetermined ones. You can choose between four races and three classes, can invest Points into the primary abilities and can add up to two traits (perks).
Old School ModeEdit
Turns off auto-mapping completely. Arm yourself with a stack of grid paper and pencils and be prepared to get lost in the dungeons! Beware, you can't change this setting after starting the game.
Completing game with this mode on unlocks Steam Do it old school Achievement.