may I point you also to a posting-thread in ResearchGate which was started recently: @ http://www.researchgate.net/post/How_to_separate_an_extracted_compound_from_DMSO_after_extraction_from_bacteria
(not knowing whether this can answer your question anyhow).
If you are going to test using cell culture system, you can also use cell culture media for your cell. PBS and ddH2O are also OK but the most importnat point in final concentration of DMSO. 0.05% of DMSO (final concentration) is not toxic to cell in general. Toxicity of DMSO is vary to cell lines though.
So far I used water/culture media to dilute my extracts. Agreed with others esp Kang Mo Ku that the final concentration of DMSO should be as low as possible. I usually keep the DMSO level less than 1% in my cell lines and would also use treated my cells with 1% DMSO as my negative control for comparison.
For cell culture purpose, DMSO can be diluted with complete media used for cell culture. OR you can go for PBS (prepared in double distilled water). The concentration of DMSO plays a major role, which has to be calibrated according to the property of cells.