diffuser or absorption panels, which would you choose?

Diffusion.

If I need absorption, I'll just add a thick rug on the floor.

In my case, in my room and my equipment,  the result using diffusers is 3D imaging, separation between instruments, clear sound. I encourage you to try with N7 panels at the back of the speakers. It’s a kind of magic in the image sound.

Later, when music is clarified, if you need to treat bass reflexions, you can use absorption, but  using absorbers, carpets, corners …

I have chosen diffusion in the form of artificial Ficus trees.  My room needed help from the lower midrange up.  The artificial Ficus trees, layered sometimes two or three deep, broke up the sound in the room giving only the sound produced directly from the speakers to my ears.  The difference was well worth the small expense. I discovered that the deeper the trees were layered, particularly BEHIND the speakers, the more the impact on lower frequencies.  6 feet deep effectively damped frequencies a little below 200hz.  

And the added benefit was a big increase in WAF. 

The ones I picked up were 5 foot tall models U$60 each from "At Home" home decorating store.  

@lemonhaze Very interesting info.  Thank you.  

@bpoletti Who knew fake ficus trees could be an audiophile tweak?  I wonder if real ficus trees sound more natural and provide more air?  Heh heh. 

@soix 

I first saw them used at T.H.E. SHOW at CES maybe 10 years ago.  There is a very prominent high end electronics manufacturer that uses them in his listening room to help control reflections and give him a more accurate reference system.  My room has a lot more problems than his room, so I have a lot more deadening needed.  And that requires MORE artificial Ficus trees scattered around the room perimeter.

I think the effect is more about the number / density of the leaves more than natural vs. artificial.