Got the expansion but only gave it a little game last night. The only thing that I don't like about these micro-expansions is the lack of documentation to explain what has changed. I'll just have to hunt it down on the Sins site. I'll give a run down of how I think things work given the expansion - it might not be completely accurate.
The diplomacy part obviously has changed. They opened up a new research section (so you have military, defence, civilian, logistics and diplomacy now) and you have an additional relationship button at the top which you can use to see how individual empires are relating to each other. Also instead of a simple percentage measure of relation ships you have this scale to 20, where ten seems to be the old 100% if I understood the infoboxes I read correctly.
The number also fluctuates according to a new set or parameters instead of simply, you do mission and get relationship percentage increase. You still do do missions for diplomatic cred but now a host of other factors makes the number fluctuate more frequently. You get bonus based on your race (+ bonus dealing with same faction, - if with another faction), if you border each other, diplomatic, resource, mission and combat choices you make also influence the number. The new envoy ships help in that regard. You park them over a planet and it will up your rep with the owner of the planet. It is all quite a bit more complicated and I need to give it a proper look.
Back to the 10 is 100% thing, basically around the 10 mark is where you can make peace treaties and share ship and planets views, which was the highest thing you could do in the pre-Diplomacy versions. Now, you can exceed 100% basically and do more. They have opened up "Pacts", which you need over 100% diplomatic relationship with an AI to use (I think the lowest I saw was 11.5). These pacts give both sides a bonus depending on what it is. If it is a metal pact you mine metal faster, a missile pact and your missiles do more damage, that kind of thing. All pacts need to be researched but can help give you a handy advantage over your enemies. On that you can research the skill to give missions, eg. attack planet, destroy ships, destroy civ/military structures. You can also research into giving the pirates specific orders, tell them to attack a specific planet for example. The computer works out how much diplomacy you need (say 5.5) and you can lower it by adding resources to offer.
As I said only played it on a small map with 3 players on normal. The true value will come out on a 4+ map with harder AIs. I do like what they have done with this expansion so far and will be playing more Sins in the near future.