It's a combination of things that make the player easier to detect. A player clanking around in metal armor is dead easy to detect so this places an emphasis on using light armor. NPCs react more naturally given the level of light in the area. A player walking around in broad daylight is dead easy to detect and is more difficult to detect when it's dark. You definitely need to stay away from light areas. Bright armor is easier to detect than dark armor so you'll want to avoid Elven armor. Stealth armor (such as the light armor used by the Dark Brotherhood and Nightingales ) provides some additional bonsues to make it more difficult to detect.
When NPCs detect movement or sound nearby, they become much more alert to sounds and movement, and they actively search longer and farther out than in the vanilla game. Just walking along I see the eyeball pop open a lot more often than in the vanilla game, and a lot of the time I don't know what is seeing me.
The vanilla Stealth perk ranks are 20%, 25%, 30%, 35%, and 40% whereas it's 10%, 20%, 30%, 40%, and 50% with this mod so the first rank is significantly easier to detect and the second rank is slightly easier to detect. Muffled Movement makes your armor 50% quieter whereas this is 25% quieter for rank 1 and 50% quieter for rank 2 in this mod. The vanilla Silence perk makes it so running no longer affects detection. This is replaced with Shadow's Embrace that decreases the relative effect light has on detection.
I remember in the vanilla game with a high sneak level being able to get face-to-face with an NPC (like a Draugr) without being detected and even being bumped into by Draugr without being detected. You won't do that with this mod.
@Shadriss You may get a kick out of this. I had the fight of my life against a Dark Brotherhood assassin at level 10 and finally managed to kick his butt after running with my tail between my legs more times than I care to count. I swiped his armor and went on my way without thinking anything about it. I then entered a dungeon and tried picking a novice lock on a chest. I mean it's a novice lock so it isn't that bloody difficult. After breaking five or six lockpicks in frustration, I looked in the perk tree and saw Lockpicking -20. NEGATIVE 20. I did a double take and then hit the active effects page to see what the goofy goof is going on where I see this: "Wearing Gauntlets: -40 Lockpicking". Doh!