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From Diablo Wiki
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→Higher Difficulty Levels: This was written before LoD expansion. I added logic in 3rd paragraph to mention Baal too.
Often you'll want to advance to the next act to get a quest reward found at the start of it, and then perhaps go back to the previous act to gain more experience before moving on permanently. This is true as well with the first quest in Act One, which gives you a bonus skill point. You might want to defeat Diablo (or Baal, if you are playing the Expansion) and move onto Nightmare or Hell, do the Den of Evil and get your skill point, then go back down a difficulty level to level up some more.
A key aspect of defeating a difficulty level if you play on Battle.net is that you will then only see games created in the highest difficulty level you can play in. If you're on normal level and you kill Diablo in D2 on normal(without LoD Expansion) or Baal (with LoD Expansion), you will only see Nightmare games to join with that character, making it hard to join one and gain more experience. You'll need someone to tell you the name of a Normal game, look yourself with another character, or create games of that difficulty level and hope others join in to boost your experience.
Keep this in mind if you are considering moving up a difficulty level to get the quick [[Quests Act One#Den of Evil|Den of Evil]] skill point.
