The Regal Diamond is a treasure in Pikmin 2. It is just a clear, fashioned diamond. It is found on the last (fifth) sublevel of the Citadel of Spiders, and is completely buried in the ground. Go to the area with some Glowcaps and an Iridescent Flint Beetle and toss your White Pikmin onto the ledge in which the treasure is buried, which can be identified using the Treasure Gauge; they'll dig it up, and you should have no hassle transporting it back to the Ship's Pod.