When we digest carbohydrates, blood sugar rises. If it goes too high it causes problems. 
Everybody knows that insulin lowers blood sugar levels, right? Less well-known is that regulation of blood sugar is the result of complex interactions of multiple hormones, not just insulin.
[As is my habit, I will use “sugar” and “glucose” interchangeably in this post.]
Allow me to review the main hormones involved in blood glucose regulation:
1. Insulin is made and stored in pancreas beta cells. As a meal is digested, blood sugar rises; the pancreas releases insulin to bring blood sugar back down by driving it into cells.
2. Amylin is also made and stored in pancreas beta cells and works to reduce blood sugar levels. Blood levels of amylin rise and fall in concert with insulin levels. Amylin slows emptying of the stomach, reduces food consumption, and regulates another hormone—glucagon—after meals.
3. Glucagon is from pancreas alpha cells. It works to raise blood sugar by promoting the liver’s breakdown of glycogen into glucose, and by promoting the liver’s manufacture of new glucose molecules.
4. Glucagon-like peptide -1 (GLP-1) is produced in small intestine cells and it’s main action is to promote insulin secretion by the pancreas beta cells after absorption of food, which lowers blood sugar levels. GLP-1 (like amylin) also inhibits emptying of the stomach, inhibits glucagon release, and inhibits appetite, all of which would tend to keep a lid on blood sugar levels.
5. Gastric inhibitory polypeptide (GIP) promotes secretion of insulin following absorption of food. GIP is also known as glucose-dependent insulinotropic polypeptide.
You can see that some hormonal mechanisms raise glucose levels; others lower glucose levels. Homeostasis is all about reaching a happy medium between the two, without wild swings one way or the other. In healthy people, eating food leads to release of gastrointestinal peptides (GLP-1 and GIP), insulin, and amylin. The interaction among them keeps blood sugar levels in a fairly level low range. In diabetes, one or more malfunctions in the system leads to abnormally high blood sugars.
The good news is that scientists have used this knowledge to devise new, effective treatments for diabetes. Examples are GLP-1 analogues and DPP-4 inhibitors.
PS: In lab animals, GLP-1 stimulates formation of new pancreas beta cells, so it hold promise in halting the progressive beta cell failure characteristic of type 2 diabetes.
Diabetic Mediterranean Diet 
I’m not impressed with the DPP-IV inhibitors. Unless Merck gets some really impressive data with Januvia and the cardiovascular outcomes trial they’re setting up, a 0.5 to 0.7 absolute drop in A1c seems pretty meager.
I do think the incretin mimetics like Byetta, though, will likely have pleiotropic effects that have beneficial effects on the disease state above and beyond just A1c lowering. Combination therapies may be especially interesting. Time will tell.
Yeah, the problem with so many of these diabetes drugs is that we don’t have good drug-specific data on hard clinical endpoints, such as cardiovascular disease, blindness, kidney impairment, and death.
-Steve