The advantage to a DO lens is that they can be shorter and much lighter than a conventional lens because they can bend light at sharper angles without increasing CA's.
DO technology has been expensive, difficult to manufacture, and the lenses have less contrast, which most people equate to less sharpness. The older models have elements made of two layers of gratings rather than the one layer found in Fresnel lenses. This is a press release related to the original DO lenses from Photokina in 2000.
http://cpn.canon-europe.com/content/education/infobank/lenses/multi_layer_diffractive_optical_element.do
Canon has been trying for 14 years since to improve the lenses. New technology for manufacturing DO lenses, bonding them to glass elements, and cutting costs.
The newer technology they have been patenting involves dispersing particles in a molded resin lens. Its hard to get those millions of particles to go where you want them, but they are apparently confident and making progress, lots of patents have been issues in the last 3 years.