Does that mean that if the pool I use selects say difficulty 3 for me and I can use the request difficulty function to reduce difficulty and therefore increase my share percentage/increase btc income ?
You'll not be making any more money. If you submit diff 3 share, it is the same as submitting three diff 1 shares.
Dynamic diff implemented by most pools is to limit network traffic, detect fast miners and send them less but harder shares to solve.
What we are talking about here is the minimum difficulty the pool will offer.
Problem I'm having with mini rigs is that when they connect to a pool that starts off with diff 2 (and does not allow me to raise the minimum difficulty), miner starts off hashing tons of diff 2 shares, then pool slowly adjusts diff to 300 or higher, and (somehow) all the diff 2 shares that were calculated become rejected (unknown work). Not sure why, but that is what I see. Sometimes a pool might drop the diff back to 2, due to a bug or network disconnects, and fast miners start the process again from diff 2 back up to 300-400s.
If I can set the minimum diff at the pool (using EMC at the moment, and it does not offer this option) or in the miner, I could avoid the problem of adjusting the difficulty level.
Telling a pool: "Please send only diff XXX or higher shares" would manually speed up this negotiation.
I think this feature might become more important as more ASICs are deployed.
