There is more than one type of Diabetes. Type one is the diabetes young children get. There is a decline in beta producing cells in the islets of langehans, in the pancreas. This results in insufficient levels of insulin.
Type two is onset in adulthood, and is a result of defects in insulin production, and also a resistance by the body to it's own insulin, mostly due to the insulin receptor in cell membranes.
There have allready been studies which showed that stem cells could be used to improve the symptoms of Parkinsons by replacing the lost cells.
The pertinent information in regards to stem cells and diabetes is that in type 1 diabetes, the cells which need fixing are only one layer thick. One of the questions researchers have is how to correctly get the tissue to form, and what conditions or properties need to be accounted for in the organization of those cells.
Any scientist who is studying stem cells will tell you the reason that to date the progress has been slow. There is a need to develop more lines. A line is when the stem cells are removed and placed in a vessel, and then multiplied .
One of the lines from the bill passed in the states states that no research can take place from any human embryos which were destroyed or discarded, except those initially used to propogate the lines they use now. New technology can make more viable cultures than those early lines. But in vitro clinics are helping people to have children every day, and in the process are destroying, or discarding human embryos. I see nothing wrong with using them for research, provided the researcher has written consent from the original donors. This way there is no "paying" for embryos/eggs removed from females, contrary to those who oppose Fox's commercial will tell you.