What method are you using to do full backups and incremental backups? You are doing this successfully?
There's not that much difference in methodology between incremental and differential. It's just a question of whether you are getting the difference from the last backup of any sort or the difference from the last full backup. So the first incremental you do is both an incremental and a differential.
Referring to the online documentation:
http://www.mysql.org/doc/refman/5.0/en/backup.html
They say: "At the moment you want to make an incremental backup (containing all changes that happened since the last full or incremental backup), you should rotate the binary log by using FLUSH LOGS."
I haven't actually done this myself before, but the description indicates that the log files are basically the transactions that will take the database from the binary full backup through the transactions that occurred up to the time of the incremental. The log files are text sql commands. That said, a differential would just be the accumulation or concatenation of the successive log files or incrementals. There should be absolutely no difference in this instance.
You FLUSH LOGS, copy the log files to where you are keeping your backups, and continue. Then You do that process again. You are just accumulating more transactions. A recovery would require the application of all those transactions. The specific details of log file names, etc. would have to be worked out, but the link above documents all that.
As another alternative, you might want to take a look at the Zmanda Recovery Manager (ZRM) for MySQL. It is open source, and there is a quick start guide to setting it up:
http://www.zmanda.com/quick-mysql-backup.html
differential backup
