The "hard sleeper" doesn't refer to the hardness of the bed. It's just that the Chinese Communist Party can't exactly talk about "First Class," or whatever, because that might imply inappropriate class distinctions. The "soft sleeper" costs more money, and it gives you a lockable room with only, I think, three others.
Here's the bustling mass in the middle of a "hard sleeper" while a few of their friends and family are sleeping above.
I've been told that it's best to get a "hard sleeper," because the guys in "soft sleepers" all smoke vile Chinese cigarettes throughout the trip. Enough people did it on my train ride, despite the abundant "no smoking" signs, that I figured it's a cultural tradition. At least in a hard sleeper there's no door to trap their smoke in with the lone, miserable nonsmoker.