Since there is an identity() function, which new users might find in
the course of trying to figure out how to construct an identity matrix,
it might make sense to add a "See also" to diag(). (And, on the same
topic, perhaps an \alias{diagonal} in diag.Rd?)
If there is interest in this I could submit a doc patch.
(Thought sparked by
http://www.r-bloggers.com/how-do-i-create-the-identity-matrix-in-r/ )
Ben Bolker