On diamond as armor, the problem comes from something that DF currently doesn't model, which is the fact that because of diamonds crystal structure being very ordered they also have a great many planes upon which they fracture relatively easily. This is why despite being one of the hardest materials out there diamonds are fairly low on the toughness scale. (And why the idea that you can test if a diamond ring is fake by dropping it or hitting it is totally false, real diamonds can shatter that way too, as long as they get hit at the right spot/angle combination.)
As for adamantine the inelasticity gives it an interesting effect, which is the total immunity to any forms of physical wear and tear. Because there is absolutely no changes in the structure of the adamantine, it doesn't suffer from any sort of weakening at all from repeated hits, which means that if you hit an adamantine sword with a hammer it would do one of two things, either be completely unchanged or totally disintegrate into dust. (Of course that boundary is much higher than any normal person could hit at, being approximately .5 the pressure required to make diamonds. If two of you working together couldn't make diamonds with your own pure strength, you can't harm adamantine in any physical way).
Adamantine's other unique property is it's sharpness. Adamantine is so sharp that if you held a thin blade of it directly over solid rock and dropped it, it's own light weight would still be enough to drive it down through the rock until such point that it either became out of alignment or gravity stopped it. (Or it was destroyed due to pressure).
As a whole at the DF level of technology you get something that was sharp enough to cut through anything but itself and was completely immune to any forms of damage that you could do; in other words, the type of legendary sword that can only be destroyed by being thrown into a volcano.