There's always that risk, but I think the philosophy is that since those hairs are bound to disappear anyway, it's probably worth it to strengthen the hairs that haven't been completely ravished by DHT yet. From what I understand, minox causes your hairs to enter the anagen (or growth) phase of the hair cycle, and somehow prolongs this phase. I'm not sure if the shedding caused by the drug is the hair going into the telegen (or resting) phase to prepare for the new growth cycle, but that would make sense to me, since the resting phase lasts appr. 5-6 weeks, roughly the same amount of time most people complain about shedding from minoxidil.
In any case, it's important to stay on it through the shedding phase, because this means that the product is working, and most of the hairs you're losing are getting ready to grow back stronger than before.
As far as diffuse thinning, I can't say for sure, but it seemed to work for me. My hair loss is mostly in the front and temples, but I've had gradual thinning throughout the whole scalp, and after using minox for a few months, it seemed a little thicker than before. I also noticed a lot fewer hairs in the shower drain and on my pillow at night than I had before ever using the stuff (although I was also on propecia at this point, so it's hard to say which was having the greater effect. I would recommend both if you're serious about trying to control your hair loss).