Diamond Clarity is a measure of the amount and visibility of imperfections in the diamond. This is gradeded on a scale from FL to I3 (Fl-Flawless, IF-Internally flawless, VVS1/2-Very very small inclusions, VS1/2- Very small inclusions, SI1/2- Slight inclusions and I1/3- [heavily] included). Anything above and including SI clarity will have small inclusions but these will all be invisible to the naked eye, even a trained gemologist will not be able to see inclusions without magnification.
Furthermore, inclusion does not really affect light performance in the diamond, even at I grading it is minimal, but with SI and above there will be no impact on the light performance of the diamond. A I rating (often called PK) will look, frankly, awful however due to the level of inclusions and their clear visibility from the naked eye.
The clarity rating you choose depends on your budget and which of the four c’s you intend to focus on more closely, if for example cut is your main concern, then you may want to downgrade your clarity rating in order to be able to increase your cut. If you do decide to trade off a higher cut grade for another of the four c’s then please ensure you do not go lower than SI2, as below this imperfections will be easily seen and the apperance of your diamond will be ruined. It is no good having a 1 carat PK2 because while it may be big, it will not look good.