That little guy will retrieve OBD2 codes and clear them.
Diagnosing takes learning symptoms and interpreting them along with a good site that has the FSM info for the codes, like GearChatter.com
Then it's about getting experience and each item you fix/diagnose gives you that experience. Hang out with local car guys and you'll gain even more info quicker.
That little guy won't give you running info though. Like RPM, TPS position, EGR pintle position etc. That's all good info to have as well. But with each added area you add some cost.
