Image hosted by and property of http://ibchem.com/IB/ibfiles/bonding/bon_img/diamond.gif

Explanation : Notice that for diamond, all of the 4 valence
electrons (2s2 2p2) of every carbon atom are involved in
tetrahedral bonding (in the form of 4 equivalent sp3 hybrid
orbitals), and hence there are no delocalized valence electrons
left or available for conduction of electricity, as is the case of
carbon's other allotrope, graphite (in which the carbons are
sp2 hybridized and each carbon atom has one valence electron not
involved in bonding and that can be delocalized to
conduct electricity along, but not perpendicular to, the plane
of the graphite layers).
3D rotating image of Graphite :
http://upload.wikimedia.org/wikipedia/commons/1/1a/Graphite_stereo_animation.gif
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