I use and have always only used a 16" round terra cotta tray as a diffuser. I have no problem with dry BBQ and no trouble with temp control.
Now, how much and the way my fuel is started can cause some temp problems but they are usually always brought back into control by just adjusting the input vent.
I don't buy the whole water pan theory, myself. But, I've never struggled with temps in my UDS so what do I know?
Good luck, bro. Just keep trying things until you find what works for you. That's going to be the best way too cook BBQ.
Operation BBQ Relief Founding Member - I am Obsessive Compulsive about BBQ. Google it.