On madhouse you'll find items you wouldn't find before in the game world (or you'd find them way later), like those blue grenades for the grenade laucher or more powerful ammo for the handgun for example. And that doesn't mean old items are replaced by others, most items are generally in different places than before. Some items you could inspect on normal that seemed like they serve no purpose will hold coins or lockpics this time around. There are more coins to find overall, because key items like keys can be hidden in bird cages. Enemies can come for you if you loiter around for too long. Also, those items that give you back crafting resources are useful this time, because loot ins't perfectly balanced. You can find way more ammo than herbs or vice versa. You also will find ammo you can't use until later. Enemies are a lot tougher, though with the unlocked Samurai Edge it evens out so far. There are more enemies, but then again, regular molded die after 3 heardshots from the unlocked handgun. It can hold only 3 bullets per magazine though. I definitely find the game more tense than before, and it actually made it feel fresh again.