| Hi QiHan,
Well, diamonds are the hardest material that we know of. An interesting article on the second hardest material can be found on the web site of Nature magazine:
Article on the second-hardest material
To summarize, the current number two spot is claimed by cubic boron nitride, an industrially manufactured compound which is very useful in saw blades and drill bits because of its hardness (and because it does not dissolve in hot iron, like diamond does).
It isn't quite right to say that only diamonds can cut diamonds, because jewelers cut diamonds routinely with special equipment. The trick is to find a "cleavage plane", that is, a direction along which the crystal breaks easily and you can take advantage of the cracks. It's probably more right to say that no other material can scratch diamonds (although one can pry open a crack on a small scale and that can look like a scratch).
(published on 10/22/2007)