Marc, when you open that lounge in Waikiki, please leave the diffusers off
From my experience:
1) Softens the flavor somewhat but bigger clouds
2) I suspect that more nicotine gets absorbed in the water due to diffusion, i get less buzz
3) Makes more of a hissy/running water sound than bubblybubbly sounds
4) Less vibration in my hookah. The smaller coals dont bounce around on the foil drum as much and don't migrate to the center of the bowl.
I personally don't like em much.