Listening Room: Diffusion vs. Absorption

I am setting up a dedicated listening room and have been looking at different acoustic treatments. Currently, the 12"x17" room is highly reflective, and actually hurt my hears when my system is played at any decent volume, I stapled Fiberglas insulation at appropriate points in the room and my ears no longer hurt but the room sounds dead, w/ no ambience. I had been planning to use acoustic foam to dampen reflection but am now thinking about solving my problems by using diffusors. Anyone have any experience in this area? Will appropriate use of diffusors give the room more ambiance? Any experience with RPG Diffusor Systems or their BAD Panel, Omniffusor, or Skyline systems?
No experience with the pieces you mention, but I have two suggestions. Use wood wall paneling instead of fiberglass. In a 10x12 room I once used, I found it was the difference between ho-hum and magic. Wood paneling, though not often mentioned, I think is a terrific way to go because it enhances the signal with the right amount of reinforcement. I also have used Room Lenses in a room 13x21 to excellent effect. It is both a diffuser and absorber and produces sonic results similar to the wood paneling. I'm curious if others have found paneling to be as effective. Good luck.
Owens Corning makes an absorbing material called 6 pound fiberglass acoustic. I am investigating this right now for my room. It cuts the first order reflections only at the uppermost frequencies, reduces slap echo, and yet does not destroy ambience. This material is much denser and more solid than what you would generally think fiberglass to be. It is applied in one, two, four and six inch applications, and is often employed in recording studios in the thicker version. For a listening room, a one or two inch covering over the sheetrock, then covered with an acoustically transparent cloth, makes a fabric wall that is attractive and acoustically correct. It is also possible this way to still mount pictures and other wall decorations, where ultra soft coverings could make this difficult. I am also looking into a fabric mounting system that uses tracks, and the cloth is rolled into a track with a tool that looks like a pizza cutter. This provides a razor sharp line where the two materials must meet, it is removable if damaged or sun faded, and does not need the additional expense of welting, sewing and staples. For the corners, behind the speakers, I plan to build a false wall, about 8" deep, with the same cloth covering it. Its false front will be removable, and then I can experiment with RPG diffusers, extra thick 6 pound fiberglass, or other treatments, AFTER all the rest of the equipment is in place. This will also hide my Tube Traps that go in the corners. I know already I want to keep them.
It sounds like you've overdampened your room. Try removing the existing room treatments a piece at a time until you start to get the level of ambience you desire. Once you're in the ballpark, then you might want to experiment with different type of products. Most rooms require both dampening and diffusion. Typically, the first reflection point requires a dampening type product. The spot directly behind the listener and the ceiling reflection points require diffusion. Unfortunately, there are no hard and fast rules and extensive experimentation is your best bet. However, be careful not to confuse phasiness with the spaciousness you desire. Try using a mono source. Perfect pinpoint mono equates to a proper stereo image.
This may not be exactly what you want to hear, but there is no simple solution. I would recommend a great book the helped me out - The Master Handbook of Acoustics. - by F. Alton Everest. There is a Third Edition due out in October of 2000, but the second Edition is very good. In my room I concentrated on direct reflections, flutter echo and then bass management. I have RPG Skylines and ASC Tube Traps and will probably also end up putting RPGs Flutter Free on one or two walls to reduce the flutter echo. Also ASC offers a service for doing a MATT test - if you are computer savvy then you can do this test at home with a good sound Card and a microphone. RPG also has a software program for speaker placement with the goal of minimizing room modes. The program also offers suggestions for the location and type of acoustical treatments. Hope this helps. Keep digging the reward is worth it.