Hmm, this may take a bit.
The diplomacy and Entrenchment expansions are basically mods placed in the root directory. The usual root is...
C:\Program Files\Stardock\Sins of a Solar Empire
The game first looks at the original base game files and goes up from there. So if you are playing diplomacy it checks the base game then entrenchment then diplomacy for newer files.
If you enabled multiple mods in diplomacy it checks them from bottom up so the top one will override a lower one.
So lets say you want a new CapitalShip_TechBattleship which is the TEC KOL Capitalship in the new diplomacy mod.
Lets say you have 3 mods enabled in diplomacy all with different versions of the KOL
The game 1st checks the base game (found original KOL, lets say ver1) then entrenchment and diplomacy (no newer KOLs here). Then the lowest enabled mod (found a newer KOL lets say ver2) then the next mod up (found another KOL, lets say ver3) then the top mod (found another KOL lets say ver4.) The game will ues ver4 of the KOL because it overrides all lower mods and base game.
Keep the same folder structure as the game but unlike the game install folder where it has Entrenchment and Diplomacy separate folders your mod will not need this. Lets say you modify files from the "GameInfo" folders from all three games. They will go into 1 GameInfo folder in your NewMod folder.
[Tutorial] Placing Mods
harpos converted reference files are a great place to start. Get all three sets if your modding for diplomacy. the diplomacy reference files only have what was changed for diplomacy, same for entrenchment. So 1st look for the files you want to modify in diplomacy then entrenchment then org game. Place all the files you modify into 1 mod folder in the folder there from eg GameInfo.
[Tutorials] 3D Modeling, Texturing, Importing & Converting