Sometimes less light is a good thing
A reflector is used to add light to your subject. A diffusor is used to reduce light.
While you may think the more light the merrier, this is not always true. High contrast conditions sometimes require eliminating some of the light to get a good exposure.
The Trouble With Contrast
A wide range of contrast is not just difficult to capture on a digital camera, it poses a problem for any camera. You can get tricked by your eyes — they are able to percieve a huge range of contrast and still see detail.
Here is an extreme example of contrast: you are taking a photo on a sunny day in the woods. The trees are in shade, but there are spots of bright sunlight. Your eyes see detail in the bright areas, but you can also see the bark on the trees. Your camera cannot.
Your camera will either catch the detail in the sunny areas and render all the trees black, or it will show the detail in the shadows and render the light area white.
In this case, there is not too much you can do, except hope that the sun goes behind a cloud so the areas of light are not so bright.
Let's say that instead of taking that photo in the woods, you want to take a portrait of a friend or spouse. If you are outside on a sunny day, you are going to run into the same contrast problem described above. If you position your subject at 90° to the sun, half their face will be bright and the other will be in shadow.
You can use a reflector to bounce light onto the shaded side of the face. You can also use a diffuser to reduce the light on the sunny side of the face.
A diffusor is basically a big white screen that allows some light to get through, but reduces its intensity.
If you suspect that you will be taking many portraits, and want to reduce some of the glare when working outside, then you might consider buying a professional diffusor. This is a large oval of thin material that you can fold up and carry around with you.
Circle diffusors come in many different sizes, depending upon how large an area you need to cover. If you are doing natural portraits with multiple people, then you will need a large diffusor. If you want to reduce the glare on your flower photographs, then a small diffusor will do.
If you would like to try your hand at diffusion, but don't want to spend any money at all, just haul out a white sheet. This works exactly the same way as a professional diffusor, it's just a lot less portable and it's harder to work with (since you need some way to hang it up).
Photo One — Natural Sunlight
This is an example of a photograph taken with natural light coming in through a window. The sun is low enough that the subject is lit by direct sunlight.
Note the range of contrast from dark to light. There are strong shadows, and some of the shadow area appears almost completely black.
Photo Two — Diffused Sunlight
This photograph is using the exact same window light as the previous one. The only difference is that in this photo there is a diffusor in the way.
The diffusor cuts back on the intensity of the natural sunlight. Shadows are softer and less harsh, and the overall tonality of the photo is much more even.
Diffusors are used for natural light portrait photography, since most faces look better when not subjected to extreme contrast.