What are the best methods to efficiently reduce the power in a 120v circuit?
The diode will cut the power in half, although you may want to check on the thermal capacity of the wire, will it heat up fully in the 8.3ms that is a single half cycle of AC? If so then the surface loading will still be to high and most likely cause premature failure.

As for the diode, you say a 400W system max. 

\$P=400W, P/V=I\$ So \$400\div120=3.3A\$ 

Now cut that value in half since the diode is blocking half the cycle.

\$I=1.6A\$

Assume the voltage drop across a general silicon diode is 0.7V. The power dissipated can be found by:

\$0.7V\times1.6A\approx1.2W\$

You should be able to find a diode online easily that meets these requirements. I would generally double it and find something meeting 3A and 2W of thermal dissipation at a minimum.