A perfect diamond would be D color, Flawless clarity, and Excellent cut, but a stone like that would cost you a fortune. To the naked eye, it's very difficult to tell that a VS1 or VS2 diamond has any flaws in it...even an SI1 diamond might look perfect to the average person. So don't go for FL, IF, or VVS clarities.
As for color, generally people want to stick between D and J. But if your diamond is, say, VS2 clarity and an Excellent cut, the brilliance of the cut and the high clarity will cover up the diamond's color. The above photo compares H, J, and K color diamonds, and I don't know about you, but I can't tell the difference.
So if you're looking for a real bargain, aim for a K color with higher marks in the other categories. There are whole communities of people who have K color diamonds and love them.