Type 1 (juvenile onset) is genetic. Developing type 2 seems to be a combination of genetics and lifestyle - not everyone who eats tons of sugary foods will develop diabetes, but it's a contributing factor, as is being overweight. It seems to be mainly caused by having high blood sugar for too long, with the 90s trend of sugary low-fat processed foods making the problem a lot worse. High-sugar/high-fat foods actually cause less of a blood sugar spike than high-sugar/low-fat foods, so when people began to make substitutions like eating frozen yogurt rather than ice cream, they may have actually been increasing their potential for developing diabetes.
Gymrat, if your friend needs convincing that this needs to be taken seriously, just point out that besides the symptoms of the condition themselves, diabetics are far more likely to develop heart disease, diabetes is the leading cause of blindness in adults, and also the leading cause (after accidents) of amputation of toes and feet (due to poor circulation.)
From everything I've read (being a type 2 myself), losing weight may not actually cure it, but it definately makes it much easier to control - you still have the condition, but the symptoms pretty much go away as long as you watch your diet. Saying you can't lose weight because you're diabetic is almost always just an excuse - I've lost about 70-75 pounds (not 100% sure as I didn't have a BFP done at my fattest.) Some overweight diabetics who can't lose weight may have some other underlying condition (thyroid problem, etc.), but there's nothing inherent in diabetes that would make you unable to lose weight - unless there's some other underlying condition, that's just an excuse to stay on the couch.
If anyone says "it's not my fault I'm fat - I'm diabetic" my reply is "no, you're probably diabetic because you're fat!"