Diggs is probably an upgrade over Paris Lenon; he has been a starter for most of his career, including 11 games last year. He missed some time with a rib injury. Diggs supposedly plays the run acceptably. As far as I can tell 2006 was the last year he played WLB on a full time basis, and racked up just 61 tackles in 10 starts. Of course, that was his first year in Carolina, so maybe that had something to do with the low totals. He could start for the Rams, though he probably fits best as a role player and special teams guy.
And that could be exactly what the Rams have in mind for Diggs, who'll be 32 when the season starts. The Rams needed to get better depth at almost every position, and Diggs definitely upgrades the linebackers if you look at him in that role. Even as a stopgap solution playing next to James Laurinaitis, Diggs has some value. I know there's frustration with the Rams free agent season, but the few moves they have made address important needs in the team's player depth, the places where they were desperately exposed last season when injuries struck. Don't underestimate the value of those kinds of moves.
I suspect the Rams will still have their eye on linebacker talent in the draft, knowing that a 32-year-old is not a long term solution to a big need on the weakside. While a trade up into the late first for a player like Sean Weatherspoon would be awesome, it's important to remember that plenty of solid starting 4-3 outside linebackers come from later rounds of the draft. Spags and Flajoe, and many other coaches, have a track record of working with players taken on the second day of the draft and getting solid production out of them.