I think it happened because I switched from pool to solo. I dont think it connects to the server but just calculated anyway. I will have to figure out how to get solo mining to work. I tried downloading earlier GUIMiner but it didnt work either. Any other suggestions?
3xx Mhashs you should stick with the pool, people with rigs that do multiple Ghashs still take potentially a week or more to get a block and thats with a setup with some serious investment in the thousands of dollars.
You don't decide the difficulty, difficulty is automatically determined, read more on how bitcoins work.
If you can't get GUIMiner to work search the forums for Phoenix + Phatk or poclbm. Those are command line mining scripts.
With 3xx Mhashs please make sure you are still profitable including subtracting cost of electricity. Based on bitcoinx.com you will make: Coins per 24h at these conditions (1690906 difficulty): 0.178 BTC, so it takes you about 6 days to make 1 BTC, 1 BTC sells for 13.70 right now...