Cabal-dev is a wrapper around caba-install that primarily adds sandboxing but also adds support for loading your project into ghci.  The sandboxing makes it possible to install multiple versions without disrupting other things.  It gives you isolation so that if cabal-install overwrites a package it only affects your current build dir.  I've completely stopped getting the diamond of death in my dependencies since I started using it.

Someone made a great write up of how to get started with cabal-dev:

It's actually very easy to get started with but extra documentation never hurts :)

Jason