A search for the SM Higgs boson in the diphoton decay channel is reported using 7.0 fb^-1 of data. The previous result used central photons (|&eta|<1.1) collected from standard CDF photon selection. Here, we improve this identification by incorporating a new photon selection that uses a neural network to reject jet backgrounds. Sensitivity is also greatly improved by the addition of forward (1.2<|&eta|<2.8) photons and the development of a new algorithm which selects photons that have converted into an electron-positron pair. No significant excess over the background was observed, so we present 95% C.L. upper limits on the production cross section times H&rarr&gamma&gamma branching fraction relative to the SM expectation. For Higgs masses between 100 and 150 GeV/c² the expected limits range from 13.0 to 27.2 and observed limits range from 8.2 to 28.2. This is an approximate 33% improvement from the previous result using 5.4 fb^-1.

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