A couple of quick questions regarding diplomats...sorry in advance if this is plodding over old ground:

1. What exactly is happening when a foreign diplomat is hanging around next to one of your cities, with that city's income changing by a few mnai each turn? I assume he's bribing my troops, but I don't seem to be losing entire units. I haven't been watchful enough to have a good before-and-after picture of what's going on...

2. How can I best use a diplomat that has evolved into an ambassador? He may be useful when remaining in one of my cities, but seemingly only when a foreign diplomat happens to enter into negotiations with that city and its governor. And as soon as I move that ambassador out of a city (i.e., to go forth and negotiate with foreign factions), his abilities drop dramatically. What to do?

Thanks in advance...hope these ain't too dumb...