A multichannel spectroscopic ellipsometer based on the rotating-compensator principle was developed and applied to characterize nanocrystalline diamond thin film growth processes by plasma-enhanced chemical vapor deposition (PECVD). With the newly-designed instrument, a time resolution of 32 ms is possible for spectra (1.5˜4.0 eV) in the Stokes vector of the light beam reflected from the surface of the growing film. Several advantages of the rotating-compensator over the simpler rotating-polarizer multichannel ellipsometer design are demonstrated here for diamond thin film growth. These include the ability to: (i) resolve the sign ambiguity in the p–s wave phase-shift difference Δ, (ii) obtain accurate Δ values for low ellipticity polarization states, and (iii) deduce spectra in the degree of polarization of the light beam reflected from the film/substrate. The degree of polarization has been applied to characterize the time evolution of light scattering during the nucleation of the diamond, as well as the time evolution of thickness non-uniformity over the probed area of the growing film. In this paper, a brief description of calibration and data reduction for the new instrument is also provided.