The 4 C's of Diamonds:    Cut       Color      Clarity       Carat Weight

Clarity:
This refers to the number of flaws and inclusions in a diamond.The fewer the inclusions the more expensive the diamond. Flaw's in a stone can appear as black dots,specks, feathers, cracks and chips. The clarity of a diamond is determined with a 10X magnification loupe. Without the loupe, these flaws can be invisible to the naked eye. Generally if a diamond is SI-2 or better in clarity it is flawless to the naked eye. If a stone has flaws visible to the naked eye it is graded as I1, I2, I3 in clarity.
Grading Chart:
FL, IF

Flawless,
Internally Flawless

No surface or internal inclusions
VVS1, VVS2

Very Very
Slightly Included

Diamonds with very small inclusions. These inclusions are very hard to determine. The inclusions are not visible to the naked eye.
SI1, SI2 Slightly Included Diamonds with small inclusions. Can be identified with a 10X loupe. These inclusions are hard to determine with the naked eye. Stones in this clarity grading with fine cut and white color are the most attractive choice when buying with a fixed budget and without sacrificing beauty or value.
I1, I2, I3 Included Diamonds with inclusions visible to the naked eye.