Prince Diamond of Nemesis is Sapphire's older brother and Emerald's love interest. He is cool, suave, expressionless. It's evident from watching Diamond carry himself and watching the way that people react to him that he is probably used to wielding almost absolute power. His decrees will make or break you; his word is law. He does not react kindly to people who speak out of turn; Sapphire shouted at him once and was telekinetically slammed into a nearby palace pillar. The only mystery is why he is referred to as 'Prince' Diamond: who's the King? Not this guy.
Diamond's story begins with the invasion of Earth. Somehow he manages to lay eyes upon the Neo-Queen Serenity, and he falls desperately in love with her. He and his clan set up a forward base in Tokyo's 30th century equivalent, where he hangs out sipping wine and gazing at images of Serenity as the clan regroups and forms another attack plan to breach the barrier that the (future) senshi have thrown up around the Crystal Palace. Diamond becomes aware of Sailor Moon's presence in the 30th Century by watching her traverse the Time Corridor between her time and his: as he lays eyes upon her, he notices the correlation between her and the Neo Queen. Diamond deduces that Sailor Moon is actually the Neo Queen at a younger age and decides that it would be easier to sway her to love him then, since she would supposedly be more malleable (and presumably would not have met Endymion yet). This completely infuriates Emerald, whose territory is now being threatened, and it annoys the hell out of Sapphire, who's been trying to convince his brother that pursuing Serenity was not part of his original plan and would not be a wise thing to do if he still wishes to carry that plan out. Diamond decides to make it a goal to pursue Sailor Moon/young Serenity in any way possible and to this end, kidnaps her from the Crystal Palace control room and tries to brainwash her with this really creepy-looking third eye that pops right out of the middle of his forehead.>_< Anyway, he's almost gotten to kiss her when Tux butts in and wrecks everything. Diamond is caught in an energy whirlwind from an unidentified source (*cough*emerald) and Tux takes advantage of it to rescue Sailor Moon. It is around this time that Sapphire really becomes concerned about the Wise Man's motives and tries to tell Diamond, who brushes him off and agrees to let the Wise Man capture Chibi-Usa. Emerald dies, then Sapphire dies, trying to tell Diamond of the Wise Man's true intentions. Although angry with the Wise Man for killing his younger brother, Diamond still decides to go ahead with his plans and attempts to get Sailor Moon/Serenity to fall in love with him again. She almost kisses him again, except that through sheer force of will she manages to overcome his spell and finally convince him that the Wise Man should not be trusted. At this time the Wise Man appears and declares that Sailor Moon must die. Diamond says more or less that he's through with listening to the Wise Man and the two begin to fight in a phenomenal clash of powers. The Wise Man then attempts to stab Sailor Moon with two black beams of energy, but Diamond jumps in front of her and takes the hit, which proves to be fatal. As he dies, he remembers the Four Sisters and tells Sailor Moon that he really did love her. ;~;
Now, getting back to Prince Diamond's third eye......I was talking to some guy at school and apparently, to get a third eye, a person has to enter into a pact with a spirit (usually a demon) and as a symbol of the pact the person gets this snazzy third eye. It's apparently blind to the mortal world but can see into the spiritual one. I guess you could also use it to hypnotize or posess people, although I'm not sure if you can shoot beams out of it or anything, like Prince Diamond did at Tux. I'm pretty sure that PD was also channeling powers from the Dark Crystal through that eye.
Prince Diamond Pictures: