  This paper reports on 3D numerical simulations of dynamics and thermodynamics
in the diffuse ISM. Our models are local, account for sheared galactic
rotation, magnetic fields, and realistic cooling, and resolve scales ~1-200 pc.
This combination permits the study of quasi-steady turbulence in a cloudy
medium representing the warm/cold atomic ISM. Turbulence is driven by the
magnetorotational instability (MRI); our models are the first to study the
saturated state of MRI under strongly inhomogeneous conditions, with
cloud/intercloud contrasts of about 100. For volume-averaged densities n=0.25 -
4 cm^3, the saturated-state velocity dispersion ranges from 8-1 km/s, scaling
as n^-0.77. The MRI is therefore likely quite important in driving turbulence
in low-density ISM regions, both at high latitudes in the inner Galaxy,and
throughout the far outer Galaxy. The MRI may be key to suppressing star
formation at large radii in spiral galaxies, where without MRI-driven
turbulence, a thin, cold layer could form and become gravitationally instable.
Our presentation also includes analysis of thermal structure (temperature and
density PDFs are broadened and include extreme departures from equilibrium, but
retain the classical two-phase bimodal character); results on the distribution
of clump masses (the mass spectrum peaks at about 100 solar masses);
comparisons of saturated-state MRI scalings with single-phase simulation
results (we find B^2 is independent of n); and examples of synthetic HI line
profile maps (showing that physical clumps are not easily distinguished in
velocity components, and vice versa).
