Step 2: Types of diode clipping
The first illustration shows:
1) An unclipped signal
2) Asymmetrical clipping, one side of the signal (not limited to a single diode.)
3) Symmetrical clipping, where both the + and - signal is clipped equally.
4) Asymmetrical clipping, both sides.
Variation #4, asymmetrical clipping, offers the most natural and "tube-like" sound. Plus, it's the most flexible--any number of diodes in series can be used to shape the effect.
Picture #2 shows just a few variations of asymmetrical clipping. Notice that LEDs are used as diodes in examples B and C! LEDs have a much higher forward voltage than typical diodes, so the clipping can be softer and more subtle.