Cut - Mistakenly, most people believe that Cut refers to the shape of the diamond.  That's actually incorrect.  Cut refers to the cut quality of the diamond, ie, how nicely its measurements are proportioned to reflect light.

Clarity - Clarity refers to how "clean" the inside of the diamond crystal is.  A diamond filled with inclusions (imperfections) will receive a lower clarity grade than a diamond that has fewer and less noticeable inclusions.

Color - Color, obviously, refers to the color of the diamond itself.  The color scale of diamonds begins with the letter "D" representing a completely colorless stone, all the way down to Z which represents a fairly yellow colored diamond - but not so yellow that the intensity of the yellowness because more valuable.

As mentioned earlier, Color receives far more attention than it deserves.  In the US, the general range of diamond colors available is between D and K colors.  The reason I say color is overrated is that even a J or K color will look white to the naked eye in a well made round brilliant cut viewed face up (as it will be in a setting).  I like to compare diamond color to teeth.  There are people with white teeth, and there are people with very white teeth.  When you see a person with regular white teeth, you never think there's anything lacking in his teeth color.  It's only when viewed immediately before or after a person with very white teeth do you even notice a difference.  So it is with diamonds.  If you put a J color diamond next to a D/E/F color diamond, you will definitely see a slight difference in shading.  But if you were to view an ideal cut J color diamond mounted in a ring, you would never suggest that the diamond is anything other than white.   For more information visit: http://www.truthaboutdiamonds.com.