Go to the Thief - Deadly Shadows System directory
Copy the DEFAULT.INI file for backup

Then Open the DEFAULT.INI with a texteditor like notepad. Scroll to the [Difficulty] 
section or use the find option. Change the following values of the indicated lines 
for the corresponding difficulty setting. Using "0" as a value usually disables that 
attribute. 

AI visual acuity multiplier - how well AIs can see
AI auditory acuity multiplier - how well AIs can hear
AI tactile acuity multiplier - how well AIs can feel
AI hitpoints multiplier - all AI starting hitpoints will be scaled by this
AI-to-player damage multiplier - all damage applied to the player by the AI is 
scaled by this

As you can see the settings are for easy/normal/hard or expert level. If you want, you can change them all, but its not necessary just remember which one you 
changed.

Item Maximums :
Gear and items are bought to be used in Thief 3. Don't go to great lengths to save 
items if you think they can help you stay alive and undiscovered, but don't waste 
them on lone guards or civilians who cannot fight back. 

On normal, the maximum gear Garrett may carry is:

Health Potion = 10 
Broadhead arrows = 30 
Noisemakers = 5 
Water Arrows = 25 
Moss Arrows = 20 
Gas Arrows = 5 
Fire Arrows = 15 
Flash Bombs = 20 
Explosive Mine = 5 
Gas Bomb = 5 
Oil Flask = 5

If Garrett proceeds to pick up another item when he is at maximum capacity, the 
item is "picked up" but is not added to the inventory. Be sure you have room 
before you start grabbing items or you're just wasting hard earned loot! 

Metal Age Nightvision :
Although shadows are important to hide Garrett, sometimes it can too dark to see 
while hiding. Crank up the Gamma/Brightness correction in your options menu to 
see the surroundings while remaining hidden. 

Don't Leave Angry :
Since the stages are often divided up into separate maps, you find yourself 
transitioning from one part to the other. If you are being chased by a guard, never 
leave the map and come back expecting everything to be normal. The guard 
chasing you will still be there and alerted to your presence. Always make an effort 
to hide in the same map you are to avoid forgetting that a guard (or party of 
guards) are waiting for you on the next map. 

The map transitions are a good place to hide (they are almost always completely 
dark). Simply go into the map transition and decline to go into the next section. 
Garrett will stay in the murky, smoky portal and almost always out of the way of 
all patrols. 

Factionalism :
By day 3 (after meeting with the Keepers the first time), players may choose to 
ally with the Hammerites, the Pagans, or both by doing them small favours. Allies 
are helpful since they will not attack you, and allow you to hide in their turf when 
you flee the City Watch (who you may never ally with). 

Befriend the Hammerites by locating and destroying the large cockroaches that 
inhabit the city. For each one you destroy, you increase Hammerite friendliness by 
one point. You also befriend Hammerites by destroying any undead using Holy 
Water or Fire Arrows. This may take a little while, but the beetles are easy to find. 
Undead are even easier to find, but you may need to stock up on fire arrows to 
deal with them adequately. 

Befriend the Pagans by locating green stones with the mark of the Trickster or by 
locating the elemental archway in the Pagan turf and firing a moss arrow into the 
target. The green stones are harder to find early in the game, so the elemental 
arch is a much better choice to befriend the Pagans. Simply shoot any one of the 
four purple nodes on the arch with an elemental arrow. Consider using moss 
arrows for this purpose; you can fire as many elemental arrows into the Pagans' 
elemental arch as you can afford to immediately ally them with you when the 
opportunity arises. 

Moss arrows are more plentiful as you pick up many in the city; more if you don't 
use them. You can save your fire, gas, and water arrows for your missions. 

Final Note: Killing, blackjacking, or looting from the Hammerites or Pagans will 
decrease your standing with that faction. 

Arrow Shops :

Each shop only has one of the four elemental arrows. 
South Quarter AKA Well Equiped Thief: Water Arrows. 
StoneMarket Proper AKA Marla: Moss Arrows. 
Docks AKA The Undercurrent: Fire Arrows. 
Old Quarter: Gas Arrows. 
 
Free Water Arrows :
You can get free water arrows in the training mission (which carries over to your 
subsequent missions) by waiting by the douse the torch exercise for water crystals 
to keep respawning. Before you leave the Blue Heron Inn forever, you may want 
to take your fill of 25 water arrows, which will go a long way in helping you keep 
shopping costs down. 

Getting to the sunken Citadel in the docks:
When you first arrive at the docks, go towards the store. Stop immediately after 
you pass the Quarantine gate. There is a box in front of you. Destroy it. Go down 
the ladder and follow the stairs. 

Defeating Keeper Guards:
Use a mine or be extra careful when sniping Keeper Guards. If sniping, you must 
hit them in the back of the head. If you are stealthy enough, you can try 
backstabbing them, because the blackjack has no effect on them.

Defeating Zombies:
If a Zombie is unaware of you, a single flashbomb will kill it. If it is aware, two are 
all that is required.

Easy Lock Picking :
For those of you who don’t have the knack to pick lock using the mouse feeling 
technique, you can use the W, A, S, D, keys on the keyboard (note no key 
mapping changes) Adjust accordingly if W-run forward has been changed etc.) You 
still have to press the keys and figure what comes after what but it cuts the time to 
lock pick more than in half. 

Broad-head Arrows:
To get free broad-head arrows, go to the tavern in the Stone Market Plaza where 
there should be 3 guards, one with a bow, upstairs. Dispose of the guard 
downstairs. After you do that run down and jump behind the bar, the guards 
upstairs may come after you but they can't get behind the bar. The one with the 
bow can shoot at you, so crouch down behind the bar and wait for him to ready his 
arrow, then stand up for a sec and crouch back down, he will fire his arrow into the 
bar and you can claim it. Repeat this to get full broad head arrows.