I posted these on Steam's Rune Classic forum and was informed about these forums here so I am reposting for anyone interested.

After playing Rune Classic with Co-op Mod v1.2 with friends we felt it was way too time-consuming, difficult and on par perhaps with a "Nightmare" skill mode. Enemies took 20-30 hits each on Classic mode (not even Hardcore mode), and it took forever to clear rooms of enemies because of this. We edited the mod's script files and created 3 different difficulty "fixes" to re-balance the player's health and the amount of damage needed to kill enemies.

In single player on Hard mode it takes about 5-6 hits to kill a lesser skeleton for example, so we matched our hard mode based on this. Medium mode would take about 3-4 hits, and if you choose the easy patch then expect to be killing enemies with just 1 or 2 hits.
Also on hard mode the player takes about 15% less damage from the coop mod's default (we felt it was just a bit too hard with the defaults, it lead to spam spawning). In medium mode you receive about 33% less damage, and in easy mode 60% less. I would recommend playing the Hard mode as its a proper feeling "hard" gameplay mode now. Choose Medium mode for a quicker and perhaps more fun play through the game with 2 players. We did not test with 3 or 4 players, so if the enemies health scales up and you want to get through them faster, use Medium or Easy patch to balance it out.

Here are the fixes, just replace your coop.int and coop.u under the Rune\System\ folder:
http://dl.dropbox.com/u/74196244/Coop_Mod_Difficulty_Fix_Easy_Mode.rar
http://dl.dropbox.com/u/74196244/Coop_Mod_Difficulty_Fix_Medium_Mode.rar
http://dl.dropbox.com/u/74196244/Coop_Mod_Difficulty_Fix_Hard_Mode.rar

I would definitely recommend the Hard mode, as now it feels like a proper hard mode compared to other games and offers the most fun.

P.S.
If coop mod makers are seeing this, we discovered an error with the Coop Mod + Rune Classic in the level Hel3b (the one right before HelElev), this happens with the original Coop Mod 1.2 as well as for ours. When entering a green-slime filled hallway with some wooden doors, if you break one of these doors the game freezes for the host (Application Not Responding), and for other players connected they get a Disconnected message after a while. We tried it with various players hosting, always crashes for the host's PC. The problem is you can avoid some of the wooden doors, but then you must cross a certain area where some enemies bust out from behind those doors and the game crashes.

The cheats are disabled in Coop Mod, "CheatPlease" and "ghost" commands dont work so clipping past it is not an option. The only option is to load the next map HelElev. It is interesting to note that in single player when you finish the level previous to Hel3b, it leads directly to the start of HelElev. So in Coop Mod they added this new level themselves and now its not fully compatible with Rune Classic (v1.10). The good news is you can skip the level as theres no boss or anything significant in there as far as we can tell and just continue as you would in the single player map cycle to HelElev.

By the way Im *really* hoping this is the only place where the Coop Mod has errors with Rune Classic but this is as far as we've played. Are some of the mod makers still active on here for possible fixes?