How do you use diminished chords?
One of the most popular uses for the diminished chord is as a bridge between two other chords. The diminished chord works so well for this purpose because it contains a high amount of tension. This tension gives a sense of release once the progression arrives on its destination chord.
What does a half diminished resolve to?
The half-diminished chord is specially a leading chord, the sound strongly pulls towards resolution. It is possible to use it as a diatonic substitution for a dominant 7th chord. Try to play the m7b5 a major 3rd higher than the dominant 7 chord to replace it. For example, use Bm7b5 for G7.