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The clarity of a diamond is a measurement of the inclusions or blemishes inside and/or on the outside of a diamond, under a 10x microscope. The rating system is subjective grader at the certification laboratory, though the guidelines are as follows:

F - Flawless: No internal or external flaws can be seen under a 10x microscope when viewed by an experienced diamond grader
IF - Internally Flawless: No internal flaws may be seen under a 10x microscope by an experienced grader, though there may be a few minor external blemishes
VVS1, VVS2 - Very Very Slight Inclusions: The diamond will contain inclusions but they will be difficult to see for an even experienced grader under a 10x microscope

VS1 and VS2 - Very Slight Inclusions: Diamond will have very small inclusions that are difficult to find even when viewed with 10X magnification. Typical inclusions are small crystals or feathers, distinct clouds and groups of pinpoints. They do not impact the diamond's beauty and are very high quality diamonds.
SI1, SI2 - Slight Inclusions: Diamond will contain inclusions easy to spot under a 10x microscope and may be visible to the naked eye
I1, I2, I3 - Included Inclusions: The inclusions are easily visible to the naked eye
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