The Kapitza-Dirac effect is the diffraction of a well-collimated particle beam by a standing wave of light. Why is this interesting? Comparing this situation to the introductory physics textbook example of diffraction of a laser beam by a grating, the particle beam plays the role of the incoming wave and the standing light wave the role of the material grating, highlighting particle-wave duality. Apart from representing such a beautiful example of particle-wave duality, the diffracted particle beams are coherent. This allows the construction of matter interferometers and explains why the Kapitza-Dirac effect is one of the workhorses in the field of atom optics. Atom optics concerns the manipulation of atomic waves in ways analogous to the manipulation of light waves with optical elements. The excitement and activity in this new field of physics stems in part from the realization that the shorter de Broglie wavelengths of matter waves allow ultimate sensitivities for diffractive and interferometric experiments that in principle would far exceed their optical analogues. Not only is the Kapitza-Dirac effect an important enabling tool for this field of physics, but diffraction peaks have never been observed for electrons, for which it was originally proposed in 1933. Why has this not been observed? What is the relation between the interaction of laser light with electrons and the interaction of laser light with atoms, or in other words what is the relation between the ponderomotive potential and the lightshift potential? Would it be possible to build interferometers using the Kapitza-Dirac effect for other particles? These questions will be addressed in this paper.