Unlock Difficulties Offline:
You can unlock other difficulty modes while offline, simply by clearing either episode on Normal, Hard, and Very Hard.

Unlock Dressing Room:
To unlock the dressing room, you do not have to have beaten any quests at all, you do not have to have cleared the game on any difficulty. All you need is have at least 10,000 Meseta in your inventory.

If you have 10,000 Meseta in the bank and less than 10,000 Meseta in your inventory, you can't get to the dressing room, but if you have 10,000 meseta in your inventory, you can.

If you have 10,000 Meseta in your inventory, you can access the dressing room from the menu that comes up when you select your character from the character select screen. You go to "Dressing Room", and it says, "It will cost 10,000 meseta to make this change, is this OK?" and then you select OK.

Hint: Ryueker Tube Trick:
Whenever you are preparing to go into a room with lots of hard enemies or right before a boss warp, cast Ryueker (or use a telepipe) but don't go through the tube. If you die, you can simply travel back through the tube and be right where you left off before you died. (You should drop all of you money too, so you do not lose it when you die.)
Submitted by - Little Elfin Launcel
Unlock Hard Difficulty
To unlock Hard difficulty, beat the game on Normal in either Ep. 1 or 2. The Hard difficulty will be available for both episodes.
Achieve Level 20 to make this difficulty available online.

Unlock Ultimate Difficulty:
To unlock Ultimate difficulty, beat the game on Normal in either Ep. 1 or 2. The Ultimate difficulty will be available for both episodes.
Achieve Level 80 to make this difficulty available online.

Unlock Very Hard Difficulty:
To unlock Very Hard difficulty, beat the game on Normal in either Ep. 1 or 2. The Very Hard difficulty will be available for both episodes.
Achieve Level 40 to make this difficulty available online.