great question. I've been wondering the same thing myself and took a trip over to wikipedia where I read the following:
"The two main factors that held diesel engine back in private vehicles until quite recently were their low power outputs and high noise levels, characterised by knock or clatter, especially at low speeds and when cold. This noise was caused by the sudden ignition of the diesel fuel when injected into the combustion chamber. This noise was a product of the sudden temperature change, hence it was more pronounced at low engine temperatures. A combination of improved mechanical technology (such as two-stage injectors which fire a short "pilot charge" of fuel into the cylinder to warm the combustion chamber before delivering the main fuel charge) and electronic control (which can adjust the timing and length of the injection process to optimise it for all speeds and temperatures) have partially mitigated these problems in the latest generation of common-rail designs. Poor power and narrow torque bands have been helped by the use of turbochargers and intercoolers."