Hey, i lately i been trying to make up "original" chord progressions and stuff, and something that i notice is that using a dim/dim7 cord as a major 7 scale degree in a minor scale, while still using the minor 7 (a maj chord) soonds good? For example in the key of Amin: Fmaj,Gmaj,G#dim7,Amin. I noticed this too in a Between The Buried and Me song called "the backtrack" http://www.youtube.com/watch?v=sZHHACdrUZo . Around 0:55 i'm pretty sure it goes Bmaj,Gdim7,G#min,Emaj (sounds 1.5 steps lower, since the guitars are tuned that way). Can anybody help me out? Can it be explained in theory? As far as i know, the dim chord is the 7th cord in a Major scale, and the 2nd Chord in a Minor scale. Hope you understood me.
your example in A minor i would understand as :

bVImaj7 , bVIImaj,VIIdim7,Imin

VIIdim7 is from the A harmonic minor scale so you have Natural minor for the other chords a Harmonic for the VIIdim7
also if you take a E7 and add a b9 to it (b9 would be an F in this instance ) you would get the notes : E,G#,B,D,F
the G#dim (enharmonically ) has the notes G#,B,D,F
so it could be treated as An E7 with the root note missing.
Yep, a viio7 functions as a dominant, and it's derived from the harmonic minor scale.
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