I've personally used the Sony '777 on almost a dozen 5.1 mixes, and many other audio professionals are integrating these processors into their reverb arsenals. Altiverb, currently slated for Digital Performer and MAS use, will be released later this year. One can only imagine where this technology will lead. Most digital reverbs use different algorithms to create rooms, halls, early reflections, plates and springs. Let's say your hand clap is at 95 dB. Five seconds later, the sound level in the room is at 35 dB. Reverb time for the room is five seconds.
Higher diffusion increases the reflections resulting in a heavier sound.
Decreasing diffusion thins out the reflections, making the sound lighter and more ethereal. Early reflections are the first of these echoes bouncing off the boundaries nearest to the source. This is independent of decay time. You could have a decay time of five seconds with a gate time of 0.5 seconds. For the 0.5 seconds that the gate is open you'll hear a reverb simulating a very large room.