Faction leves are very much like regular leves but with better rewards such as unique gear. Unlike regular leves, however, you must pay a certain number of Faction Points for the privilege of completing them. Regular levequests will give you points with various different factions which you can later spend to do those quests, so the more levequests you complete the more Faction leves you can go on. Like regular leves, they still take up one of your 8 regional leve slots.
As for difficulty, that depends on the leve itself. I've found all of the lower ranked ones (R20) easy enough to solo, but later ones involve notorious monsters which may prove difficult (or outright impossible) to defeat on your own. I'm not high enough rank to have attempted them, so I can only speculate on that.
Leves only give the rewards to the leve holder. Your friend gets no chance at the item unless they are leve-linking. Monster drops and chests are the only exceptions to this.
Edited, Jan 21st 2011 12:30am by Glitterhands
FFXI: Siren Server: Seiowan Lvl 99 WHM, SCH, BLM
FFXIV: Ragnarok Server: Lemuria Glitterhands All Classes 50