Answer:
Its like a crown or a tiara inscribed with the words "Wit, beyond measure, is man's greatest treasure." Rowena Ravenclaw used to own this when she was alive. It it one of the horcruxes. It is destroyed by Fiendfyre, or cursed fire, in the last book.
When Rowena Ravenclaw owned the diadem, her daughter Helena Ravenclaw (who is now the Ravenclaw ghost) stole it and ran away. Rowena sent the Bloody Barron to bring her back. When he found her he asked Helen to come back, she refused, and then out of rage the Bloody Barron killed her. After he realized what he had done, he killed himself (he is now the Slytherin Ghost).