A star appears in a telescope as a small Airy disk
surrounded by faint diffraction rings. A telescope is said to be
"diffraction limited" if its optics are made with enough accuracy so
that all the light rays from a star fall within that star's Airy disk
and diffraction rings, with no excess light being scattered out of the
disc and rings by defects in the mirrors. Optics that bring all light
rays to a focus within 1/4th of a wavelength of light of each other at
the final focus are considered to be diffraction limited. Technically, a
telescope is diffraction limited if it meets the Rayleigh limit - which
specifies the separation in arc seconds of two equally-bright binary
stars which appear to be just touching as being equal to 140 divided by
the aperture in mm. The Rayleigh limit, which deals with a telescope's
ability to separate closely-spaced stars, should not be confused with
the Rayleigh criterion, which deals with how accurately an optical
system is made. Note that the visual Rayleigh limit for an 8" (203mm)
aperture telescope is 0.69 arc seconds (140 / 203), a less-stringent
specification than the Dawes' limit of 0.57 arc seconds. Telescopes
meeting either limit can resolve more detail than the Earth's atmosphere
will allow us to see under average seeing conditions, as our atmosphere
typically limits the seeing to no better than one arc second resolution
(the resolution of a 6" scope) on even a very good night. Five arc
second resolution or worse is more typical of an average night.