The degree of internal flaws (imperfections) is determined by the type and strength of the method of magnification.
A diamond observed using a jeweller's 'loupe' at 10x magnification will see much less than the same magnification using a sterioscopic microscope as any flaw will be better observed and the risk of missing it far smaller.
A diamond grading expert will always use a microscope to determine the clarity of a flawless diamond and for the diamond to be called internally flawless the norm is that the imperfection cannot be seen at 10x magnification.
Having said that, in practice this is not always the case as a good diamond grader will always first use a 25x magnification to spot the flaw and then bring it down to 10x magnification in order to determine if it is still visible. If it is it will be downgraded to VVS1, very very slight 1 and if no longer visible the diamond will merit its internally flawless classification.
A diamond is never really flawless as the magnification, using the latest in modern microscopes can find flaws or imperfections at over 25x magnification, in fact if a 100x magnification is used quite a few hundred of microscopic pinpoints can be seen as this is part of the diamond crystal's formation.
In the 'old' days, some 50 odd years ago, diamonds were called flawless as they were never graded using a microscope which was only introduced, by the GIA in the late 30's and in Europe in the early 70's, so in those days the 10x loupe was the norm.
If anyone, therefore, is trying to sell you a 'flawless' diamond you should take into consideration that he or she may not be a great expert on diamonds and obtain a second opinion.
At the Jewellery Web Shop we use the best diamond expert consultants in the business. These people are not jewellers but REAL diamond experts with diplomas in gemmology, cutting and laboratory grading skills so you can be absolutely sure that your diamond will be correctly graded and more importantly valued to its true merit.