QUOTE(jchong @ Nov 1 2008, 09:45 PM)
When buying a diamond, remember the 4 Cs - Cut, Clarity, Color, Carat. Each of these 4 factors influence the diamond price.
Most people would start with the Carat or weight of the diamond. How big do you want it? In my opinion at least 0.30 carat, otherwise it looks too small. Of course if you can afford it the wife would always like bigger.

Note there is a big price jump at 0.50 carat, 0.75 carat and 1.00 carat.
For Color, I think G is reasonably good enough. The scale starts from D (whitest) and you don't want to go to I and below (might have slight yellow tint).
Clarity - VS1 is also reasonaly good enough. You pay through the nose for flawless or even VVS1/VVS2. Not worth it in my opinion.
Finally we come to Cut, which is the trickiest to assess since most certs don't have a grading system. But this is important because cut determines how sparkly the diamond is.
Lastly, I prefer to buy a diamond that comes with a Certificate - this is to ensure you get what you pay for. The cert must come from a reputable lab like GIA, AGS, HRD.
Buying tip: look out for diamond sales and buy the diamond loose. I've seen some good deals at Habib sales, etc. After that then choose the ring setting. For engagement rings, the classic solitaire style never goes out of fashion.
I support wat jchong said,

most important thing when comes to diamond selection is the "4C".
My 2 cents, I followed the priority below:
Carat --> Cut --> Color --> Clarity
Y clarity the last? simple, oni those VERY experienced can discover a flaw under naked eye starting from SI2. Which means any grade before SI2 is hardly tell... (of coz u'll c the flaws with the 10x magnifying scope

) wat for paying so much buying a VVSI diamond? with the same price u might be able to get a much bigger VS2 diamond

who will ask your wife-to-be to take out the ring n inspect it under a magnifying scope in order to find the flaws rite?
Y cut is important? as jchong mentioned earler, becoz it determines how sparkly the diamond is. Mine is with 8hearts 8arrows, excellent cut
Buying loose diamond is the best move ever! Coz u can check the precious diamond from each and every angle clearly (some shops may cover the flaws by using its setting), n yet, u can compare the price

But 1 thing I would like to correct is, the price gap is actually at 0.50 carat, 0.70 carat, 0.90 carat and 1.00 carat. If u can afford, try to get above 0.30 carat (slightly above is ok), coz buying anything below 0.30 carat is not worth buying. And plz try your best to oni go for certified diamonds (such as GIA, AGS or HRD)

mine is GIA certified
Well lastly, the best of the best way to select engagement ring is buy the loose diamond first! for the setting, bring along your wife-to-be. Let her choose the best setting she likes (coz she is the one who wears it for the rest of her life, too risky if u got something she doesn't really like but hv to pretend she likes it

, and u can get her measurement 100% fit) although this way is no more surprise, but u can still collect the ring urself (dun bring her n of coz dun show her the ring this time) until u propose!! "ta~~da~~" This was how my fiance did

Everyone take a wild guess, how many carat is mine? (HINT: not bigger than 1.00 carat, he's not a millionaire

)
All the best in your diamond hunt~~