I am mining at 220 MH/s, are there any reasons why I shouldn’t raise my difficulty? If I were to put it at 512 would this have any negative impact on my side? It's just less traffic right? I already know this doesn’t change my chances of finding a share of the required difficulty. I'm just wondering what happens on my end.
At that hashrate, you probably don't want to increase difficulty. It will not significantly change network load but will increase income variance.
At 220MH/s estimated time to share is 8 hours. For instance, that means that there's 5% probability of not finding any shares for 24 hours. For two week period, your estimated number of shares is 42, and there's 5% probability to find 31 or less shares, which means only 75% of estimated income. Of course, this also works in positive direction, and your income may be higher than estimated as well. Now if you increase your share difficulty, this variation will be even higher. If you are not a gambler, you want stable income.
When mining in p2pool, your income variance depends on both pool's blockrate variance and your own sharerate variance. For details see my post here https://bitcointalksearch.org/topic/m.2060914
