I diffuse everyday and have for many years. My hair is cut in an angled bob (shorter in the back, gets longer towards the front) so I start with drying the back first since I want it to spring up more. I push the diffuser in and hold there for a bit, then move to another section in the back and do the same thing. Once that is springing up pretty nicely, then I move towards the front. In the front I don't put the diffuser in at all. I just hold it close to my head without actually touching it and let it dry like that. That seems to keep me from getting frizzy and helps keep the style. When it is almost dry (I diffuse to about 85 to 90% dry) then I will pull the top section up just a little with my fingers to get a little more lift and that's it. It took me awhile to get that routine down but it seems to work the best and gives me consistent good hair days.
As for damaging your hair from the heat, I have diffused with heat for many years and I don't have any serious damage from it. I also shampoo everyday and that hasn't hurt it either. I do also get regular haircuts too so that keeps any potential split ends at bay. I did switch over to Jessicurl products a few months ago and that has made alot of difference in the overall appearance. It's softer and less producty looking than with previous stuff I have used.
Hair Type: mix of 3's, growing out an angled bob, color-treated red.
Current products: GVP conditioning balm for co-wash and leave in, Curl Junkie Curls in a Bottle, Pattern Pusha and Garnier Anti-humidity hairspray
Hair idol: Kimberly Schlapman from Little Big Town