"Sherman, set the Way Back machine for... "
David Barnett
" ...Warren in Lancaster, PA." 
Please allow me the liberty of addressing your secondary questions on the economies of diamond sharpening before the first. You ask:
"David, you talk about the cost of diamond sharpening being small, that supplies last a "long, long time". Are you talking about two thousand sharpenings or two hundred thousand? "
Another good focusing question, Warren. Let me speak to that. If one were to use the two elements that I, Bill Tindall and others have come to adopt and recommend, one would need only a 600-grit diamond stone and some 14,000-grit diamond paste. Ideally, you would acquire a lapping substrate of cast iron, but other substrates may be pressed into service, and if free is cheap enough, then that's pretty much a non-issue.
The diamond stone, depending on the size and manufacture, will average around 50 dollars for an 8" x 2" or 8" x 3" model. This is a one time cost. Let me explain. You'll often hear erroneously, that diamond stones wear out too quickly, that when one first gets a diamond stone, in a few short weeks it's lost its mojo, so to speak, and no longer has that same aggressive cutting action when it was first tried.
When a diamond stone is right-out-of-the-box new, it's not yet itself. It's far too aggressive and scratchy and liable to leave too-deep scratches for its nominal grit number than what is characteristic for that designated grit when the stone has finally been broken in. That's right, there's a break-in period on all diamond stones. Whether the stone has inadequate accompanying literature to describe break-in, or perhaps none at all, or whether it's skipped over by the purchaser, it's quite common for first-time (and perhaps only-time) buyers to think it worked correctly at first but subsequently and too-quickly died.
I could have quite a collection of nicely broken-in stones if I'd been so inclined, but after addressing the skepticism of their disappointed purchasers (no, I wan't selling stones), things seemed to get better for them. Mind you, there were some that were simply not to be disabused of their unrealistic expectations, and I fully understand why this was so.
An any rate, when a stone is new, sharpen every kitchen knife you own, flatten a chisel or two, put a new edge on the machete (what, you don't have a jungle behind your house?), and so on. Before too terribly long, you will have properly 'ruined' your diamond stone to the point of usefulness. Now it should be ready to put to work on plane irons and chisels.
I should probably say here (I know you already know this stuff, Warren, so I'm including it for those who may not) that there are two types of diamond and two types of diamond distribution on stone surfaces. Firstly, diamond can be monocrystalline or polycrystalline. Without getting into the nuances of either, I will say that I prefer poly stones, such as the EZE-Lap, to DMT mono stones, but this is only a personal preference. Both mono and poly are excellent and perfectly suited for woodworking tools at 600-grit, which diamond hone makers usually market as 'fine' stones. Note that when the stone is new, the scratches it leaves is anything but fine, further evidencing the considerable break-in required for it to cut as a fine stone.
The second thing is the way the diamond is presented, which is either continuously (again, my preference) or intermittant, which often appears as little non-diamond-coated dots. Again, both will work well, but as I sometimes sharpen very narrow and tiny tool surfaces, I tend to favor continuous. Some companies, such as DMT, make and market both. It's a personal preference and not one to really get too hung up about.
By now you're wondering how long will this diamond stone last? I could give you the DeBeers "diamonds are forever" line, of course, but depending on how you use your stone, well, more-or-less, forever, but your mileage may vary. I'll tell you my story. I bought my first and only EZE-Lap in 1993, and it's still going strong. End of story. I've had my hard translucent Arkansas stones for much longer, but that's because I bought them two decades earlier, as I recall.
Now if I was talking not about honing woodworking tools and about faceting gems on a rotating horizontal lap, it would be a very different situation. Depending on gem hardness, size, and several other factors, a major one being how heavy is a cutter's hand pressure on the quill or handpiece of a faceting machine, one can and does go through multiple laps in a lifetime of faceting. Also, sharpening hard gravers with their tiny pointed business ends in the same manner on similar lapping discs can be tough on laps, too. My diamond costs for non-woodworking is a good bit higher, by the way.
But honing woodworking tools by hand on a diamond honing stone isn't nearly so demanding and wearing as those other uses. Yes, I have seen worn and worn out diamond stones, so yes, it can and does occur. Still, price any good quality Arkansas stones or Shapton waterstones lately?
On to the diamond paste. Okay, there's some variation here, but you can buy a 5-gram syringe of 14,000-grit diamond paste for 6 dollars, although 8 dollars is fairly common. Now when I bought my first syringe of 14,000-grit diamond paste, I paid more than what I'd pay today -- about 18 dollars, I think it was. My second syringe I'm guessing was around 14 dollars and my last, which I'm probably a third of the way into, was under 10 dollars, so even with the two unopened tubes of paste in my woodworking shop, that breaks down to $3.44 a year.
Note that you'll use more diamond when initially charging an iron lap, and rechargings will diminish until it settles into routine of adding a few dots now and then if the lap seems to be cutting more slowly (you're still likely using too much).
Now, if we take my 11" x 2 1/2" EZE-Lap at today's price of $46.95, not at what I paid way back, and a tube of diamond paste at $5.95 from Daniel Lopacki (who just retired, but whose daughters are carrying on), and let's even say we came up with a nice scrap of cast iron for, say, $30 (a bit high, but not out of the picture), we get to $82.90. We'll even add $15 for shipping, bringing the total to $97.90. And that's with a cast iron lap, remember.
Okay, let's say this outfit lasts for ten years, that's not so bad. Even if it only survives five years, it's not apt to break the bank. Lets even say that you could manage to go through 5 grams of paste a year, and kill off a stone every two years, which isn't going to happen, that'd still be only $29.47 a year over ten years. (No, you're not going to kill off the lap. No way.)
So there you have it, the economic drawdown for basic diamond sharpening.
"When you recommend diamonds for beginners are you really thinking that they might need to buy and learn another technology if they want to learn carving, moulding or turning?"
Another good question, Warren, and a more difficult to answer one. I have many tools available to me for sharpening profiled moulders, carving tools, and so on. I'm quite fond of my very old, hard and soft Behr slips but I'm just as apt these days to use my Foredom flexshaft for profiled cutters. I wouldn't expect beginners to have rotary tools, and for that matter, I would be somewhat reticent to recommend them except for roughing out, regrinding, and so on. While many gouges can be honed easily-enough on a flat stone for the outside bevel, the inside requires something else.
For someone who has carving tools in traditional steels, there are plenty of options; Arkansas, India, waterstones, abrasive papers over slip or dowel-shaped wood or plastic, for that matter, wood or plastic charged with diamond, leather bent to fit a gouge's sweep with stropping compound or diamond paste, and others.
To complicate matters, let's introduce something I've recently been following and hearing about; the development of light, thin, and incredibly tough HSS carving tools in traditional carving sweeps and geometries. Should these get a toehold, and I'm assured they will, the way we choose carving wood species and the way we sharpen carving tools will definitely change. While there are diamond files on the market, from cheap to expensive, and while EZE-Lap and others make profiled diamond honing slips, these are often coarser than what I'd like.
I'd speculate that abrasives manufacturers and hone makers will accomodate these new carving tools with viable diamond slips, files, hones, and so on. I've even come up with a few ideas myself, along these lines but hope some clever manufacturer arrives at the same idea and makes them so I won't need to. Of course, these would also likely work for profiled cutters, too, but when a woodworker commits to these more-specialized period tools, I assume they'll outlay commensurately to sharpen these tools.
As for turning, well, grinding wheels adequately take care of HSS turning tools, and this makes grinders downwardly compatible for non-HSS tool steels. So I'm not sure how this presents any new issues, but perhaps I'm missing something.
"Come along, Sherman."
"I do not see any steels that exceed O1 in both toughness and hardness as many seem to claim."
What part of 130% or even 200% are you not understanding, Warren?
I seem to recall one of your chiefest arguments against non-O1 steels is that they're too hard to sharpen on Arkansas stones. While these gains are arithmetically progressive in Phil's charts, may I remind you what they represent in real gains to woodworkers as anecdotally expressed by Andrew F in this very thread:
"When working old-growth Eucalypt, the Stanley irons last 6 feet of planing length, the Record Cr-V irons lasted about 18 feet and M2 irons lasted several hundred feet.
Planing one 2m length of timber, then having to stop and resharpen, was impetus for my change."
http://tinyurl.com/WC-AndrewF
Did you miss this? And if not, did you not find it in the least bit compelling? And if you were not impressive, should no one else be?
Steve Elliott informs us, again in this very thread, of his findings and the innovations of bladesmiths to enhance 3V performance? There is nothing to be had but versatility, options, and more appropriate materials choices, as I see it. Not to see this, to deny this, seems not only self-defeating but incomprehensible to some of us. Is this somehow threatening? Does it somehow upset someone's need for coralled and managed antiquity? I will admit to feeling this way for a time when I studied period furniture, but I got past it -- grew out of it.
http://tinyurl.com/WC-SteveElliott
Steve certainly isn't proselytizing for HSS alone. Did he not tell us how O1 violin knives hardened to 64 HRC bested similar efforts with 3V?
In this instance, O1 performed better for this task for this toolmaker, concording with my own experience making tiny carving tools, knives and cutters. While O1 at 64 HRC may not be such a good idea for plane irons and more so, for chisels, it can be entirely appropriate for these special applications.
I don't have the information in front of me, for which I apologize, but pushing the envelope, I'm assured one can get to 66 HRC with a toughness roughly 130 to 150% of O1, although I'm not so sure it'd be worth the trouble, but then what do I know?
Without an agenda, so to speak, such as remaining in character for a given historical period, eclectic toolmakers can do as they see best, reaping the benefits of a broader palette of steel choices.
Now one could pooh-pooh it away with the specious "but eucalypt is one of those Australian nightmare species, so it shouldn't count". But if an M2 edge cuts so well and lasts so long on one of those nightmare species, won't it likely be even more impressive on our less challenging species? Is this another regression to "if it's good enough for me, it should be good enough for everyone else", or even "if it was good enough for woodworkers working in whatever century I'm so enamored with and know so much about, shouldn't I defend against this onslaught of modernity?" I hope not, but this is how it's beginning to seem. Prove me wrong.
Again, if your main objection to the harder steels was predicated upon the failure of Arkansas stones to adequately sharpen them in a reasonable interval if at all, isn't that's somewhat like the Asian parable of the physician who after inventing a miracle cure for all ailments who believed that if his remedy failed to cure, then that malady was therefor not only incurable but that the patient deserved to die?
"Perhaps if one uses tools in an abusive way, like planing at a high angle or using a chisel until it no longer cuts, these exotic steels have a place."
Do you see half-pitch as abuse? How about middle-pitch? Still too abusive? Okay, York-pitch then. I'm not sure I grasp this as an issue, but I'll allow that if you're talking about an antique tools being used more harshly than intended, I'll remain skeptical but willing to modify my viewpoint. As for driving a chisel edge into the ground, well, I've been guilty of that when I first started out. It's been a long time, though.
I'm wondering, do you feel protective of the Ancien R�gime steels? I can sympathize, by the way, as I sometimes feel that way about other things, things that were better, things I long for, more accommodating, more capacious, such as cars I could fit in.
I understand that some, not all, mind you, but some, period enthusiasts approach their proclivity less as simply historians and craftspersons, but more in the vein of roleplay or even in more extreme cases, cosplay. Perhaps an enterprising tool seller will start offering period breeches and so on, in their catalog alongside replica planes of the 18th Century. I don't know. It really isn't my thing. Besides, they won't come in size-76, anyway.