As we approach the new millenium, error diffusion is approaching the 25th anniversary of its invention. Because of its exceptionally high image quality, it continues to be a popular choice among digital halftoning algorithms. Over the last 24 years, many attempts have been made to modify and improve the algorithm—to eliminate unwanted textures and to extend it to printing media and color. Some of these modifications have been very successful and are in use today. This paper will review the history of the algorithm and its modifications. Three watershed events in the development of error diffusion will be described, together with the lessons learned along the way.