There are many ways to demonstrate diffusion, but one in particular is useful in a classroom of any size. Place a shallow, wide, clear beaker or large, clear petri dish containing water on the flat surface of a lit overhead projector. Wait a moment until the water stops jiggling, then add a couple drops of red, green, or blue food coloring to the water (yellow food coloring does not provide enough contrast). Students can easily view diffusion occurring on the overhead screen. It takes a few minutes for the coloring to completely disperse.
To show the effect of temperature on the rate of diffusion, use hot water in one beaker and cold in another, and proceed in the same manner.