The computer's paddle just hits it straight back every time, which makes it very not hard at all. You should maybe give it some similar physics to the player's paddle. On the impossible challenge I can just hold the ball and watch the clock count down. Also, if the ball touches the sides on his side of the net it counts against me, but I don't think it should.
I like the paddles close together - makes pong a little faster and more interesting. But every ball gets stuck bouncing between the paddles either at the top or at the bottom. That pretty much makes it unplayable. Even something simple like launching the ball from the middle of the playing field might help that a little bit.
I almost want to become a developer just so I can check out this uploading system so many people seem to be having trouble with lately. How hard can it be?