The first ability of the Diplomat in preventing a planetary invasion doesn't seem like much unless I'm reading it wrong. Could someone explain how it works?

The Diplomat is easily the strongest of the leaders. Example:

Xxcha has a Diplomat and 2 GFs on Mecatol Rex. Hacan attacks Mecatol destroying the Xxcha fleet, and invades with 12 GFs. Because of the Diplomat, the invasion is stopped, and the GFs return to their ships. Xxcha retains control of the planet. Mecatol Rex cannot be protected by a diplomat for the rest of the round or the following round. So if another player would destroy the Hacan fleet and try an invasion the Diplomat would have no effect. Or if Hacan played Warfare to or Unexpected Action AC to remove his CC from the system, he could invade again without the Diplomat stopping him. In any case, Hacan, or anyone else for that matter, can invade the planet next round withouth the Diplomat stopping anything.

Also, if Hacan were to successfully invade, and land his own Diplomat, the same restriction would apply to him - the planet would not be protected this or the following round.

Oftentimes this one round delay is enough to make you able to score a secret objective or to garrison the planet more. Another example:

Hacan has the Secret Objective Conqueror. Xxcha has a Diplomat, 1 GF and a space dock on one of his Home system planets. Hacan attacks with 8 GFs, but the Diplomat stops the invasion. Xxcha activates the system to build 4 GFs and 1 PDS. With Production secondary he builds 2 GFs and 1 PDS. Next round, he moves before Hacan, and builds 5 more GFs. Now Xxcha has 12 GFs and 2 PDS units on the planet that Hacan would need for his Secret Objective. Good Luck with that.

This is an example of a little thing that can go along way. Octo has already outlined some of the better situations for a Diplomat to be in. Basically, it's an ability that can totally fubar your opponent's plan if you use it at the right time. The rest of the time it may not be much, but in those few circumstances it can change the course of the game.

Thanks for your help. I understand it now.