0.5mg of Xanax is equivalent to 10mg of diazepam. Xanax acts for around 2-4 hours, whereas diazepam may act for 8-10. Xanax is very potently anxiolytic and amnesic (you'll forget shit)m and as the only benzo it has some antidepressant properties. Add to this that the effects begin very quickly, and it can be considered euphoric by some.
Diazepam is longer-acting, has relatively stronger muccle relaxing properties, and is sedating at higher doses (but so is Xanax). Diazepam is a jack-of-all-trades benzo.
Xanax is considered more recreational by most, myself included. I would even say equivalence-wise smaller Xanax doses may beate diazepam; ie. 2mg Xanax would be 40mg diazepam, but I'd rather take 2mg Xanax than 60mg diazepam.