Diffusion - Softening the light in a daylight studio

A collage - sourced from three daylight studio shoots - natural, diffused front lighting

Next time you're out and about on a partly cloudy day watch the shadows on a companions face. When the cloud covers the sun a natural diffusing effect occurs which reduces contrast (Lightens shadows and darkens highlights), softens the sharp edges of shadows and lightens the dark tones of the shadow areas. In effect it's turning a small bright light source into a larger softer light source. 
Photographers do this in the studio by bouncing light off white surfaces or by shining the light through big diffusion screens made from transparent white material. 
The best form of diffusion I've found for a natural daylight studio is the sheet foam that many appliances come wrapped in. I use it to cover the windows when I set up a daylight studio in my clients homes, it creates the softest light but doesn't alter the intensity or brightness of the light. It also serves to simplify reflections in shiny surfaces like the eyes. 
I'm about to try a roll of frost cloth on a newborn shoot tomorrow, I'll share the results soon.

Max - Natural, diffused side lighting. Daylight Studio