The computer gets a hell of a lot smarter at Prince. It still builds cities at a bunch of silly places, and doesn't handle bodies of water very well. But it can balance its budget just fine, and later on in the game you need to work a bit to gain a technological advantage or build the wonder you're after.
If I were to push into the hardest difficulty, I'd do it on a standard-sized or larger archipelago map and play a city-state friendly game with a small-to-mid-sized empire. I'm not at that level yet, though, and would like to hear from someone trying out the higher difficulties.
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