Hardness
Scientists use the Mohs scale to describe the hardness of a substance, assigning it a number from 1 to 10. The higher the number, the harder the substance. Diamond stands alone at 10 because it is the hardest natural substance. Graphite is far softer, with a hardness somewhere between 1 and 2. Graphite is so soft that when you rub it on a piece of paper, it leaves a mark.
Color
Diamonds are transparent or translucent minerals that usually have only a subdued color of their own but reflect and refract light so that they appear to contain an internal "fire." Graphite is a dark gray or black mineral that is dull and opaque.
Crystal Structure
Diamond and graphite are both crystalline but the internal structure of the two crystals is very different. These variations cause the striking differences in color and hardness between the two minerals. Graphite is made of layer upon layer of carbon atoms arranged in hexagons that are tightly bound together. The sheets are widely separated, which allows them to slide past each other. This makes graphite both quite soft and a good lubricant. In a diamond, the carbon atoms are arranged in a three-dimensional lattice, in which every atom is strongly bound to its neighbors in every direction. This three-dimensional strength is what makes diamonds so hard.
Value
Diamonds are very rare and so command high prices. A single gem's price will vary widely depending on the diamond's size, color, cut and clarity. As of April 2011, Sotheby's Auction House was offering a 10.99-carat (slightly less than 2.1 grams) pink diamond of the highest quality grade in an emerald cut. The auction house estimated the gem's value at between 9 and 16 million dollars. At the other end of the scale, graphite is the substance used to make pencil lead. Those classic yellow Dixon Ticonderoga #2 pencils, each with a strip of graphite up the middle, sell for about 20 cents each.