I work on many engagement and anniversary diamond rings with just about every price point imaginable. But regardless of price point most customers want something just a little bit larger or better. Most people have some idea of the 4 C's (Color, Clarity, Cut, & Carat Weight), but less knowledge of how each of these things affects the final product - the ring you wear on your finger.
The first instinct by many is to look at what's considered "The Best" in white diamond - the D Flawless, or more accurately the D Color (Pure Colorless) IF (internally Flawless) gem. A perfect stone. What makes these perfect is that absolute lack of any color tint and total lack of any imperfection within the crystal. These are great stones, but command a significant premium over stones which are not considered perfect. Significant as in 30-40% for the same size as a stone 1 step down. So is it worth it, and how far down from perfect should you go?
One of the interesting things about diamond grading that people do not realize is the extremely small differences from grade to grade. With regards to color, the GIA (Gemological Institute of America), which invented the diamond grading scale, groups the first three grades (D,E,F) together as Colorless. The next four grades (G,H,I,J) are grouped together as Near-Colorless. What this means is that while there are difference in color from D-J, a J colored stone, will still have a relatively white look to it. In fact, within one to two grades, it's often very difficult to tell the differences in color. Also note that colors are graded face down from the side, where color saturation is more readily viewed.
In regards to clarity, the grading goes from IF (internally Flawless) down to I (or Included), with VVS (Very Very Slightly Included) to VS (very Slightly included) to SI (slightly included). All these stones typically have inclusions that are invisible to the human eye unless viewed under magnification. So for all practical purposes an SI1 stone can (but won't always) appear to be as clean as an IF stone, if not viewed under magnification.
Given that visually there are slight variations between grades, it makes sense to judge a stone on it's overall beauty and how it fits into a budget. It's also important that every stone is judged and graded evenly, and includes a proper GIA certificate and not a certificate with exaggerated grades.