I was lucky enough to get beta accounts at both Diigo and ma.gnolia, and have had some interesting exchanges with developers of both services. So I thought that I'd write about my impressions of them. I should point out that both services are being added to all the time, and some of the things I'd like to see appear seem to be possibilities for the future, or are planned features.
Diigo and ma.gnolia go for somewhat different aesthetics. Diigo presents the bookmarks in quite a compact, stripped-down way. Generally the arrangement is very functional, with your bookmarks shown on the left with links to expand the presentation to show your comments or highlights (more about those later). You can also sort the bookmarks in different ways (including by read/unread status, which allows you to use Diigo as a holding tank for pages to read later). On the right, there's a scrolling box containing your tags. When you view your bookmarks by tag, there's an additional box showing your related tags, which also allows you to add or subtract tags to the filter. You can also perform batch operations on multiple bookmarks by selecting a subset with the checkboxes and using a drop down menu. The downside of that is that editing a single bookmark is a bit clunky because you have to check the box first.
ma.gnolia is rather gorgeous, as you might expect from a site designed by Jeffrey Zeldman's happy cog design company. The flip side of that is that you don't get to see many of your bookmarks on your home page, and even the more compact 'view all' doesn't fit that many more on. That may be a plus or a minus depending on how you feel about white space.
As I mentioned, both services provide the ability to mark bookmarks as private, and both store cached versions of pages so that if the content changes, you can see the version that you bookmarked. ma.gnolia also provides a 5-star rating system for each bookmark, though I haven't quite been sure what to make of that. Should I regard it as how useful the bookmark is to me, or the quality of the page it bookmarks?
Diigo exclusively uses a toolbar (which works in Firefox, IE or Flock) for getting bookmarks into the system: there isn't as yet even a form on the Diigo page for marking a URL as a bookmark. The toolbar is great and offers unique features like custom searches and filtered bookmark sets (for example, all your bookmarks tagged with 'rails'), and the main button changes in appearance when you've already bookmarked the page you're on, or others have left public comments on a page. This is surprisingly useful, as I've often ended up with duplicate bookmarks after visiting a site twice and forgetting that I'd bookmarked it the first time.
Earlier on, I mentioned comments and highlights. You can leave comments on a page which can be private (only you can see them), or public (any Diigo user can see them). You can also select a portion of text on the page, which then gets associated with your bookmark and can be viewed in your bookmark list. Finally, you can attach 'sticky notes' to these highlights, which appear when you roll over them with a mouse (again, these can be public or private). Diigo allows you to set whether bookmarks should be public or private by default, and allows you to post Diigo-ed bookmarks to de.icio.us and/or to your browser bookmarks simultaneously, which is a useful way to keep things in sync. Unfortunately, if you don't use Firefox, IE or Flock, you lose most of the functionality. The toolbar is great, but I hope that they add tools for other browsers in due course.
Oddly, both services are weakest on their searching capabilities. Diigo has a relatively powerful and flexible search, which allows you to search your own or everyone's bookmarks, and simultaneously does a full-text search of all of the fields. However, the search page looks completely different to the bookmark page, and you have to use the back button to find your bearings again. ma.gnolia shows you search results by effectively filtering your bookmark page, but it defaults to a search of everyone's bookmarks, and takes a couple of clicks to search your own bookmarks or tags. I've seen it mentioned that ma.gnolia allows you to search for conjunctions of tags (e.g. bookmarks tagged with both 'ruby' and 'rails'), but for the life of me I haven't been able to get that to work. I think that both need to work on their search interfaces, because as collections of bookmarks grow, they become very unwieldy, or even useless if you can't quickly find what you're looking for.
ma.gnolia has a similar concept of 'contacts', but there are also 'groups' a bit like flickr groups which you can join and post bookmarks to. I think that these groups can also be private, which might be a great way to share bookmarks with a small group of colleagues, or a team. Recent bookmarks from your contacts and groups appear at the bottom of your bookmark page.
It's difficult to say how effective either service will be in these social aspects until the number of users increases a bit, but both have some very promising aspects.
Updated (22/02/2006): Corrected some factual errors about Diigo.