Femtosecond electron diffraction is a rapidly advancing technique that holds a great promise for studying ultrafast structural dynamics in phase transitions, chemical reactions, and function of biological molecules at the atomic time and length scales. In this paper, we summarize our development of a tabletop femtosecond electron diffractometer. Using a delicate instrument design and careful experimental configurations, we demonstrate the unprecedented capability of detecting submilli-å ngström lattice spacing change on a subpicosecond timescale with this new technique. We have conducted an in-depth investigation of ultrafast coherent phonon dynamics induced by an impulsive optical excitation in thin-film metals. By probing both coherent acoustic and random thermal lattice motions simultaneously in real time, we have provided the first and unambiguous experimental evidence that the pressure of hot electrons contributes significantly to the generation of coherent acoustic phonons under nonequilibrium conditions when electrons and phonons are not thermalized. Based on these observations, we also propose an innovative approach to measure the electronic Grü neisen parameter in magnetic materials at and above room temperature, which provides a way to gain new insights into electronic thermal expansion in ferromagnetic transition metals. Microsc. Res. Tech. 72:131-143, 2009. V