I think I saw a diabetes thread awhile ago in Special Needs Parenting.
I don't have a babe with diabetes, but my sister was dx at the age of 6 with Type I. My parents were devastated. They thought she would lose her limbs, go blind, and die by the age of 20.
Well......she's very healthy. She keeps a tight control on her blood sugar and started giving herself her own insulin at the age of 8. She was a swimmer and water polo player in high school and is now an event coordinator after graduating college. My sister did have a few hypoglycemic episodes in her teens, but had an insulin pump put in a few years ago and LOVES it. When your dc is old enough, that's something you should look into.
Having diabetes doesn't mean that your dc can't have treats. Since they have the autoimmune kind where the beta cells in the pancreas don't make insulin, they can inject more insulin on occasion to compensate for extra carbs or sugar.
I totally second the idea of seeing an endocrinologist. They don't really specialize in diabetes, but all endocrine disorders.
Take care, mama!