http://tapeop.com/tutorials/83/diy-diffusors/

Pretty interesting read. I'm hoping my ARC 2 purchase will help me. I'd have to make a bunch of these things.

Will these work to defuse a bomb? Or is this a different type of defuser? 

Interesting project.  Done right, it could be decorative as well.

Makes for a cool-looking decoration in your studio.

That IS a cool idea. The construction is questionable though. Gluing the end grain of the studs to masonite or hardboard is not a reliable joint. They're bound to fall off eventually as the wood expands/contracts. Epoxy would probably work better. But eliminating the masonite/hardboard completely and edge gluing the pieces together would be very reliable, (but not with paint in the joint).
 
He says balsa can be substituted. My question is, would foam insulation work, or is the density of the material critical? That would make this a much simpler project.

Styrofoam is perfectly acceptable for diffusion, as long as it is not an soft, open cell type.  Density is not really an issues since these only work on high frequencies to begin with.  
 
If you are interested in making your own a free tool called "QRDude" is really useful for making custom 1d and 2d panels.
 
You can find much higher quality 1 1/4" square white pine at Home Depot.  A little more expensive, but worth it for looks.  It is a good idea to glue the edges of the bars as you insert them.  
 

Why not screw them in?

rumleymusic
Styrofoam is perfectly acceptable for diffusion, as long as it is not an soft, open cell type.  Density is not really an issues since these only work on high frequencies to begin with.  
 
If you are interested in making your own a free tool called "QRDude" is really useful for making custom 1d and 2d panels.
 
You can find much higher quality 1 1/4" square white pine at Home Depot.  A little more expensive, but worth it for looks.  It is a good idea to glue the edges of the bars as you insert them. 

Thanks for the info. QRDude looks very useful.
 
The insulation they put outside basement blocks is the stuff I'm thinking of. Something like this: http://www.homedepot.com/p/Owens-Corning-FOAMULAR-250-2-in-x-2-ft-x-8-ft-Tongue-and-Groove-Foam-24DD/100320335#product_description 
I've been doing woodworking 7 days a week since Thanksgiving, even worked 24hrs straight 2 days ago with help to fulfill orders, so another wood project is the farthest thing from my mind right now. I can get 4/4 basswood for $.50/bf which is pretty light and butternut for about the same price from an Amish mill. Everything is expensive at HD. But, ugh.. maybe in a few weeks.

IK Obi
Why not screw them in?

Because it would take 144 screws per panel plus countersinking and pilot holes. Screws don't hold very well in end grain either, but it should be okay for something like this with such little stress. It would be easier to just glue the pieces together.