Legendary
From Halopedia, the Halo wiki
Summary
Legendary is the hardest difficulty in the Halo: Combat Evolved games. The enemies are stronger, smarter, and have more health. The speed runs in the Going Nowhere Fast competition by fansite HBO had to all be performed on this difficulty level.
Legendary is Ultra Hard, by any standards. Marines are useless, as they are easily killed by Grunts, due to the sheer power they posess in their well-planned attacks, you'd better use stealth or your goose is cooked faster than you can say "They're everywhere!"
By completing Halo: Combat Evolved on the Legendary mode, an alternate ending movie is shown instead of the movie shown after beating the game on all the other levels.
In Frankie's Bungie Updates, Frankie describes Halo 2's Legendary as:
A whole new sick twist on game difficulty. LEGENDARY includes bizarre stuff like perma-death for co-op players — meaning that you can't hopscotch like you can on other difficulty levels. Once a player dies on LEGENDARY, both players are hurled back to the last checkpoint. It's brutal. Also, that place where you encountered two grunts and a flowerpot on NORMAL? Well now they're Hunters, high-ranking, sword-carrying Elites, and they're all PMS-ing. Seriously, sticking your head around a corner on level two can get it shot clean off.