Julianne Taylor of Paleo & Zone Nutrition posted the following excellent lecture on Facebook:-
Eating Through The Myths: Food, Health and Happiness - Taylor, Prof. R., Berlin, 28-Sep-12
1) It's a chronic calorie excess (of carbohydrates and/or fats) that causes problems.
2) Motivation, motivation, motivation!
3) Both diet and exercise are important. See Move More: Solutions to problems.
4) You can't outrun your fork. See The 5th Myth of Modern Day Dieting: You Can Outrun Your Fork.
5) Underlying Insulin Resistance needs to be addressed. See Insulin Resistance: Solutions to problems.
See also Reversal of type 2 diabetes: normalisation of beta cell function in association with decreased pancreas and liver triacylglycerol, and Pathogenesis of type 2 diabetes: tracing the reverse route from cure to cause.
For more information on Prof. Taylor's work, see Reversing Type 2 Diabetes.
EDIT: Long-term results are now in. See Primary care-led weight management for remission of type 2 diabetes (DiRECT): an open-label, cluster-randomised trial. The full study is behind a pay-wall, but here are a couple of Figures from it.