Diamond Ore

Diamond Ore is generally considered to be the most valuable and elusive block in the game. It can be mined for a diamond gem using an Iron or Diamond Pickaxe. Diamond ore can be obtained by the enchantment Silk Touch on a pickaxe. Therefore you can use the Diamond ore block to create traps or even decoration.

Uses
Diamonds can be used to make Shovels, Pickaxes, Axes, Swords, Hoes, and Armor of the highest quality. It is also a prequisite ingredient in Jukeboxes, solid diamond blocks, and Enchantment Tables.

Prospecting
Diamond Ore can be found in veins of 1-8 blocks (sometimes even more if multiple veins happen to spawn together, and down to 1 if the block that was supposed to be diamond ore is occupied by dungeon, ravine, stronghold, lake, lava pool, other ores, patches of dirt and gravel etc.) Diamond only appears in the bottom 16 layers of the map.
 * Diamond ore occurs in roughly 0.1276% of stone from levels 2-16.
 * There is an average of 3.097 diamond ore per chunk.
 * Always dig around a diamond block before mining it to ensure that the gem won't fall into a cave, lava, etc.
 * It is recommended to use a pickaxe with the fortune enchantment when mining diamond. This can yield up to 4 diamonds per ore block (with Fortune III).

Trivia

 * When diamond was first introduced, it was called emerald.
 * Diamond ore can be smelted into a diamond gem, although the only way to obtain it is with the silk touch enchantment. However, it could be smelted even before the then-unobtainable Redstone and Lapis Lazuli ores could be smelted.
 * Diamond, like other ore, is easier to find in caves and empty lava pools, as this gives more surface area.
 * Before Beta 1.6, diamond was about 50% more common in the quadrant south-west of the point (0,0) compared to the quadrant to the north-east.
 * In some vein formations, ores connect diagonally. Therefore it is recommended to mine around diamond ore. This also permits checking for lava.
 * Diamond ore, along with other ore, appear in the background on the achievement page.
 * Diamonds are considered to be the rarest item in the game. However, during Beta 1.6, Clay was actually rarer due to a bug. Likewise, in 1.0.0, End Portal Frames are purposefully rarer, but finding them is more controllable.
 * Once a slime-spawning chunk is found, creating a bigger cavern for them to spawn in is a good multipurpose way to look for diamond (when closer to bedrock) and other ores.