diff --git a/diff-cache.c b/diff-cache.c
index ef522cd233..7e87d28f3a 100644
--- a/diff-cache.c
+++ b/diff-cache.c
@@ -57,14 +57,17 @@ static void show_new_file(struct cache_entry *new)
 	show_file("+", new, sha1, mode);
 }
 
-static int show_modified(struct cache_entry *old, struct cache_entry *new)
+static int show_modified(struct cache_entry *old,
+			 struct cache_entry *new,
+			 int report_missing)
 {
 	unsigned int mode, oldmode;
 	unsigned char *sha1;
 	unsigned char old_sha1_hex[60];
 
 	if (get_stat_data(new, &sha1, &mode) < 0) {
-		show_file("-", old, old->sha1, old->ce_mode);
+		if (report_missing)
+			show_file("-", old, old->sha1, old->ce_mode);
 		return -1;
 	}
 
@@ -101,7 +104,7 @@ static int diff_cache(struct cache_entry **ac, int entries)
 				break;
 			}
 			/* Show difference between old and new */
-			show_modified(ac[1], ce);
+			show_modified(ac[1], ce, 1);
 			break;
 		case 1:
 			/* No stage 3 (merge) entry? That means it's been deleted */
@@ -109,7 +112,19 @@ static int diff_cache(struct cache_entry **ac, int entries)
 				show_file("-", ce, ce->sha1, ce->ce_mode);
 				break;
 			}
-			/* Otherwise we fall through to the "unmerged" case */
+			/* We come here with ce pointing at stage 1
+			 * (original tree) and ac[1] pointing at stage
+			 * 3 (unmerged).  show-modified with
+			 * report-mising set to false does not say the
+			 * file is deleted but reports true if work
+			 * tree does not have it, in which case we
+			 * fall through to report the unmerged state.
+			 * Otherwise, we show the differences between
+			 * the original tree and the work tree.
+			 */
+			if (!cached_only && !show_modified(ce, ac[1], 0))
+				break;
+			/* fallthru */
 		case 3:
 			if (generate_patch)
 				diff_unmerge(ce->name);
diff --git a/diff.c b/diff.c
index 8dfa624432..95488cdd9f 100644
--- a/diff.c
+++ b/diff.c
@@ -125,9 +125,16 @@ static void builtin_diff(const char *name,
 		printf("Created: %s (mode:%s)\n", name, temp[1].mode);
 	else if (!path1[1][0])
 		printf("Deleted: %s\n", name);
-	else if (strcmp(temp[0].mode, temp[1].mode))
+	else if (strcmp(temp[0].mode, temp[1].mode)) {
 		printf("Mode changed: %s (%s->%s)\n", name,
 		       temp[0].mode, temp[1].mode);
+		/* Be careful.  We do not want to diff between
+		 * symlink and a file.
+		 */
+		if (strncmp(temp[0].mode, "120", 3) !=
+		    strncmp(temp[1].mode, "120", 3))
+			exit(0);
+	}
 	fflush(NULL);
 	execlp("/bin/sh","sh", "-c", cmd, NULL);
 }
@@ -163,13 +170,35 @@ static int work_tree_matches(const char *name, const unsigned char *sha1)
 	if (pos < 0)
 		return 0;
 	ce = active_cache[pos];
-	if ((stat(name, &st) < 0) ||
+	if ((lstat(name, &st) < 0) ||
+	    !S_ISREG(st.st_mode) ||
 	    cache_match_stat(ce, &st) ||
 	    memcmp(sha1, ce->sha1, 20))
 		return 0;
 	return 1;
 }
 
+static void prep_temp_blob(struct diff_tempfile *temp,
+			   void *blob,
+			   unsigned long size,
+			   unsigned char *sha1,
+			   int mode)
+{
+	int fd;
+
+	strcpy(temp->tmp_path, ".diff_XXXXXX");
+	fd = mkstemp(temp->tmp_path);
+	if (fd < 0)
+		die("unable to create temp-file");
+	if (write(fd, blob, size) != size)
+		die("unable to write temp-file");
+	close(fd);
+	temp->name = temp->tmp_path;
+	strcpy(temp->hex, sha1_to_hex(sha1));
+	temp->hex[40] = 0;
+	sprintf(temp->mode, "%06o", mode);
+}
+
 static void prepare_temp_file(const char *name,
 			      struct diff_tempfile *temp,
 			      struct diff_spec *one)
@@ -196,20 +225,36 @@ static void prepare_temp_file(const char *name,
 	if (!one->sha1_valid || use_work_tree) {
 		struct stat st;
 		temp->name = name;
-		if (stat(temp->name, &st) < 0) {
+		if (lstat(temp->name, &st) < 0) {
 			if (errno == ENOENT)
 				goto not_a_valid_file;
 			die("stat(%s): %s", temp->name, strerror(errno));
 		}
-		if (!one->sha1_valid)
-			strcpy(temp->hex, sha1_to_hex(null_sha1));
-		else
-			strcpy(temp->hex, sha1_to_hex(one->blob_sha1));
-		sprintf(temp->mode, "%06o",
-			S_IFREG |ce_permissions(st.st_mode));
+		if (S_ISLNK(st.st_mode)) {
+			int ret;
+			char *buf, buf_[1024];
+			buf = ((sizeof(buf_) < st.st_size) ?
+			       xmalloc(st.st_size) : buf_);
+			ret = readlink(name, buf, st.st_size);
+			if (ret < 0)
+				die("readlink(%s)", name);
+			prep_temp_blob(temp, buf, st.st_size,
+				       (one->sha1_valid ?
+					one->blob_sha1 : null_sha1),
+				       (one->sha1_valid ?
+					one->mode : S_IFLNK));
+		}
+		else {
+			if (!one->sha1_valid)
+				strcpy(temp->hex, sha1_to_hex(null_sha1));
+			else
+				strcpy(temp->hex, sha1_to_hex(one->blob_sha1));
+			sprintf(temp->mode, "%06o",
+				S_IFREG |ce_permissions(st.st_mode));
+		}
+		return;
 	}
 	else {
-		int fd;
 		void *blob;
 		char type[20];
 		unsigned long size;
@@ -218,19 +263,8 @@ static void prepare_temp_file(const char *name,
 		if (!blob || strcmp(type, "blob"))
 			die("unable to read blob object for %s (%s)",
 			    name, sha1_to_hex(one->blob_sha1));
-
-		strcpy(temp->tmp_path, ".diff_XXXXXX");
-		fd = mkstemp(temp->tmp_path);
-		if (fd < 0)
-			die("unable to create temp-file");
-		if (write(fd, blob, size) != size)
-			die("unable to write temp-file");
-		close(fd);
+		prep_temp_blob(temp, blob, size, one->blob_sha1, one->mode);
 		free(blob);
-		temp->name = temp->tmp_path;
-		strcpy(temp->hex, sha1_to_hex(one->blob_sha1));
-		temp->hex[40] = 0;
-		sprintf(temp->mode, "%06o", one->mode);
 	}
 }
 
diff --git a/git-apply-patch-script b/git-apply-patch-script
index dccad27061..13ec1c4490 100755
--- a/git-apply-patch-script
+++ b/git-apply-patch-script
@@ -8,71 +8,134 @@
 #
 
 case "$#" in
-2)    exit 1 ;; # do not feed unmerged diff to me!
+2)
+    echo >&2 "cannot handle unmerged diff on path $1."
+    exit 1 ;;
 esac
 name="$1" tmp1="$2" hex1="$3" mode1="$4" tmp2="$5" hex2="$6" mode2="$7"
-case "$mode1" in *7??) mode1=+x ;; *6??) mode1=-x ;; esac
-case "$mode2" in *7??) mode2=+x ;; *6??) mode2=-x ;; esac
 
-if test -f "$name.orig" || test -f "$name.rej"
-then
-    echo >&2 "Unresolved patch conflicts in the previous run found."
-    exit 1
-fi
+type1=f
+case "$mode1" in
+*120???) type1=l  ;;
+*1007??) mode1=+x ;;
+*1006??) mode1=-x ;;
+.)       type1=-  ;; 
+esac
 
-case "$mode1,$mode2" in
-.,?x)
-    # newly created
+type2=f
+case "$mode2" in
+*120???) type2=l  ;;
+*1007??) mode2=+x ;;
+*1006??) mode2=-x ;;
+.)       type2=-  ;; 
+esac
+
+case "$type1,$type2" in
+
+-,?)
     dir=$(dirname "$name")
-    case "$dir" in '' | .) ;; *) mkdir -p "$dir" esac || {
+    case "$dir" in '' | .) ;; *) mkdir -p "$dir" ;; esac || {
 	echo >&2 "cannot create leading path for $name."
 	exit 1
     }
-    if test -f "$name"
+    if test -e "$name"
     then
-	echo >&2 "file $name to be created already exists."
+	echo >&2 "path $name to be created already exists."
 	exit 1
     fi
-    cat "$tmp2" >"$name" || {
-	echo >&2 "cannot create $name."
+    case "$type2" in
+    f)
+        # creating a regular file
+	cat "$tmp2" >"$name" || {
+	    echo >&2 "cannot create a regular file $name."
+	    exit 1
+	} 
+	case "$mode2" in
+	+x)
+	    echo >&2 "created a regular file $name with mode +x."
+	    chmod "$mode2" "$name"
+	    ;;
+	-x)
+	    echo >&2 "created a regular file $name."
+            ;;
+        esac
+	;;
+    l)
+        # creating a symlink
+        ln -s "$(cat "$tmp2")" "$name" || {
+	    echo >&2 "cannot create a symbolic link $name."
+	    exit 1
+	}
+	echo >&2 "created a symbolic link $name."
+        ;;
+    *)
+        echo >&2 "do not know how to create $name of type $type2."
 	exit 1
-    } 
-    case "$mode2" in
-    +x)
-	echo >&2 "created $name with mode +x."
-	chmod "$mode2" "$name"
-	;;
-    -x)
-	echo >&2 "created $name."
-	;;
     esac
-    git-update-cache --add -- "$name"
-    ;;
-?x,.)
-    # deleted
-    echo >&2 "deleted $name."
+    git-update-cache --add -- "$name" ;;
+
+?,-)
     rm -f "$name" || {
-	echo >&2 "cannot remove $name";
+	echo >&2 "cannot remove $name"
 	exit 1
     }
-    git-update-cache --remove -- "$name"
-    ;;
-*)
+    echo >&2 "deleted $name."
+    git-update-cache --remove -- "$name" ;;
+
+l,f|f,l)
+    echo >&2 "cannot change a regular file $name and a symbolic link $name."
+    exit 1 ;;
+
+l,l)
+    # symlink to symlink
+    current=$(readlink "$name") || {
+	echo >&2 "cannot read the target of the symbolic link $name."
+	exit 1
+    }
+    original=$(cat "$tmp1")
+    next=$(cat "$tmp2")
+    test "$original" != "$current" || {
+	echo >&2 "cannot apply symbolic link target change ($original->$next) to $name which points to $current."
+	exit 1
+    }
+    if test "$next" != "$current"
+    then
+	rm -f "$name" && ln -s "$next" "$name" || {
+	    echo >&2 "cannot create symbolic link $name."
+	    exit 1
+	}
+	echo >&2 "changed symbolic target of $name."
+        git-update-cache -- "$name"
+    fi ;;
+
+f,f)
     # changed
+    test -e "$name" || {
+	echo >&2 "regular file $name to be patched does not exist."
+	exit 1
+    }
     dir=$(dirname "$name")
-    case "$dir" in '' | .) ;; *) mkdir -p "$dir" esac || {
+    case "$dir" in '' | .) ;; *) mkdir -p "$dir";; esac || {
 	echo >&2 "cannot create leading path for $name."
 	exit 1
     }
-    # This will say "patching ..." so we do not say anything outselves.
-    diff -u -L "a/$name" -L "b/$name" "$tmp1" "$tmp2" | patch -p1 || exit
+    tmp=.git-apply-patch-$$
+    trap "rm -f $tmp-*" 0 1 2 3 15
 
+    # Be careful, in case "$tmp2" is borrowed path from the work tree
+    # we are looking at...
+    diff -u -L "a/$name" -L "b/$name" "$tmp1" "$tmp2" >$tmp-patch
+
+    # This will say "patching ..." so we do not say anything outselves.
+    patch -p1 <$tmp-patch || exit
+    rm -f $tmp-patch
     case "$mode1,$mode2" in
     "$mode2,$mode1") ;;
     *)
-	echo >&2 "changing mode from $mode1 to $mode2."
 	chmod "$mode2" "$name"
+	echo >&2 "changed mode from $mode1 to $mode2."
 	;;
     esac
     git-update-cache -- "$name"
+
 esac
diff --git a/git-prune-script b/git-prune-script
old mode 100644
new mode 100755
diff --git a/update-cache.c b/update-cache.c
index 05d584ed48..893ba8679d 100644
--- a/update-cache.c
+++ b/update-cache.c
@@ -15,6 +15,12 @@
  */
 static int allow_add = 0, allow_remove = 0, not_new = 0;
 
+/*
+ * update-cache --refresh may not touch anything at all, in which case
+ * writing 1.6MB of the same thing is a waste.
+ */
+static int cache_changed = 0;
+
 /* Three functions to allow overloaded pointer return; see linux/err.h */
 static inline void *ERR_PTR(long error)
 {
@@ -51,7 +57,7 @@ static void fill_stat_cache_info(struct cache_entry *ce, struct stat *st)
 	ce->ce_size = htonl(st->st_size);
 }
 
-static int add_file_to_cache(char *path)
+static int add_file_to_cache_1(char *path)
 {
 	int size, namelen;
 	struct cache_entry *ce;
@@ -93,9 +99,35 @@ static int add_file_to_cache(char *path)
 	default:
 		return -1;
 	}
+	if (!cache_changed) {
+		/* If we have not smudged the cache, be careful
+		 * to keep it clean.  Find out if we have a matching
+		 * cache entry that add_cache_entry would replace with,
+		 * and if it matches then do not bother calling it.
+		 */
+		int pos = cache_name_pos(ce->name, namelen);
+		if ((0 <= pos) &&
+		    !memcmp(active_cache[pos], ce, sizeof(*ce))) {
+			free(ce);
+			/* magic to tell add_file_to_cache that
+			 * we have not updated anything.
+			 */
+			return 999;
+		}
+	}
 	return add_cache_entry(ce, allow_add);
 }
 
+static int add_file_to_cache(char *path)
+{
+	int ret = add_file_to_cache_1(path);
+	if (ret == 0)
+		cache_changed = 1;
+	else if (ret == 999)
+		ret = 0;
+	return ret;
+}
+
 static int match_data(int fd, void *buffer, unsigned long size)
 {
 	while (size) {
@@ -165,6 +197,7 @@ static struct cache_entry *refresh_entry(struct cache_entry *ce)
 	if (compare_data(ce, st.st_size))
 		return ERR_PTR(-EINVAL);
 
+	cache_changed = 1;
 	size = ce_size(ce);
 	updated = xmalloc(size);
 	memcpy(updated, ce, size);
@@ -245,6 +278,7 @@ static int add_cacheinfo(char *arg1, char *arg2, char *arg3)
 	if (!verify_path(arg3))
 		return -1;
 
+	cache_changed = 1;
 	len = strlen(arg3);
 	size = cache_entry_size(len);
 	ce = xmalloc(size);
@@ -339,9 +373,13 @@ int main(int argc, char **argv)
 		if (add_file_to_cache(path))
 			die("Unable to add %s to database", path);
 	}
-	if (write_cache(newfd, active_cache, active_nr) || rename(lockfile, indexfile))
+
+	if (!cache_changed)
+		unlink(lockfile);
+	else if (write_cache(newfd, active_cache, active_nr) ||
+		 rename(lockfile, indexfile))
 		die("Unable to write new cachefile");
 
 	lockfile_name = NULL;
-	return has_errors;
+	return has_errors ? 1 : 0;
 }