Watch the Diminished Moving Down online guitar lesson by John Stowell from Modern Jazz Improv
The best way to familiarize yourself with a new harmonic concept is in the context of a tune or a short progression. In the case of a song that has diminished chords in the progression, the written melody could be used as a resource to generate ideas in your improvisations. In this segment, I also touched on diminished major 7 voicings, which can be used interchangeably with diminished voicings, moving up and down the neck in minor thirds. The chords can also be analyzed as major triads with a b9 (usually in the bass).