Treating a small room with diffusers?

I saw this quote about room treatments in another forum where one audiophile is advising another audiophile:

Diffusion is what you need. It cures the "empty room" feeling of specular reflections without the stuffy dead feeling of absorbtion. It makes the space feel bigger than it really is. The trick is covering a large enough area economically. I'll get you a couple 2x2 RPG BAD Panels to check out. Phase type diffusors are even more efficient than BAD Panels, but are thicker and usually cost more. GIK diffusor is priced well for its performance.

I know next to nothing about room treatments but what he says sounds good. My listening room is a rectangular family room (stuffed with furniture etc.) 11X18X8

1. What are diffusors?
2. What's the minimum I'd pay for these in a room my size
3. How do they make a room sound bigger than it is?

Thanks for your help