Welcome to FitDay and the forums.
Congrats on your progress thus far--sounds like you've made the commitment to get healthier--good for you!
I think the South Beach is one of the better "diets" out there. I don't know much about diabetes, but I understand that by eating every few hours you can avoid big swings in blood sugar. I've also heard/read that Type 2 can go away if you get serious about losing weight and exercising--I hope that's true in your case.
I guess my advice is to keep doing what you're doing. Stick with your eating plan (I really don't like to think about this as "dieting" as that sort of implies that at some point you are going to stop), get into an exercise routine, drink plenty of water and log EVERYTHING into FitDay every single day without fail.
47 M 5'8"
May 4, 2010...... 440? lbs. (Start FitDay Size 60 Jeans)
June 19, 2010.... 393 lbs. (First Weigh-in)
June 19, 2011.... 229 lbs. (164 lbs. gone in one year :-)
Current Weight... 185 lbs. (Size 36 Jeans)
Next Goal 169 lbs. (07/04/12)
Ultimate Goal 165 lbs. (12/31/12)
The best exercises for weight loss are Fork Putdowns and Table Pushaways.