It used to be used a lot across Europe, but since all the border crossings have effectively disappeared with the EU, it is not used much now. Anything that is carried through EU to Eastern Europe and beyond, is now normally carried using T forms, which are a lot less hassle. Of course, with more Eastern countries joining the EU, TIR Carnets will tend to die out more.
The reason for the diagonal line is to show the load is not being carried under TIR regulations. Most TIR boards are permanently fixed to the vehicle and some (the French notably) like to jump on the offence of showing TIR plates when the load is not under TIR regs.