A diamond's cut does not refer to the diamonds shape but to the proportion, polish and symmetry of the diamonds facets. The cut of a diamond dictates how much light is captured by the diamond and in turn its brilliance. Every diamond is rated from "Excellent" to "Poor". If cut to it's best possible proportions the stone will capture more light giving the diamond an "Excellent" cut.
Cut grades are a very important price factor. Cut poorly a diamond appears dull and lifeless. The closer to Excellent the cut the higher the price. Quality jewelers will carry Excellent to Good grades, while anything lower is considered to be a "mall quality". When deciding between Cut and Carat, it is important to keep in mind that a better cut outshines a slightly larger diamond.