This randomized pilot study is an important first step in planning a large multi-center clinical trial to evaluate medical and laser approaches that could improve the visual outcome for patients with diabetic retinopathy. This study will provide preliminary safety and efficacy data on these therapies as well as allow for assessment of the performance of ocular outcomes and study design for use in subsequent trials. If there are no safety concerns, the results of this pilot will be helpful in the design of a large multicenter clinical trial by providing data on estimates of expected treatment effects. Using a factorial design, this study will compare (1) photocoagulation using a diode (micropulse) laser to mild Early Treatment Diabetic Retinopathy Study (ETDRS) style (continuous wave laser using green or yellow wavelength) focal photocoagulation and, (2) the effect of treating with antioxidants (high dose Vitamin E) to placebo prior to and following laser photocoagulation. The primary outcome is a visual acuity drop or increase of 15 letters or more from baseline three years after enrollment. The secondary outcomes will be a 50% reduction in retinal thickening as measured by Optical Coherence Tomography (OCT), a two-step reduction in macular thickness when compared to standard stereoscopic fundus photographs, and a 50% reduction in the area of leakage as measured by fluorescein angiography at 1 year and 3 years after the initial laser compared to baseline. Additional outcomes will include the time (from baseline) of the first laser treatment and the number of retreatments required during the course of the study. These outcomes will be assessed for potential use in future trials. We are concerned with the following specific questions regarding safety and efficacy: Safety Is the risk of visual loss in patients with clinically significant diabetic macular edema potentially different across treatment groups? Efficacy Is there any evidence that any of the treatment combinations could be effective in reducing retinal thickening?