A religion's devotion to opulent jewelry and designer fashion can raise serious questions about its spiritual commitment. When Jesus bade Christians to take up their cross and follow him, did he really mean for it to be a gold cross studded with emeralds? Would Muhammad have felt at home at the Taj Mahal? Did the Buddha call us to seek enlightenment in a temple filled with gold adornments and a statue made of jade?
Compelling arguments can be made against adornment in excess, and we can even find devotees of almost any religion who argue that all bling is an offense. One line of argument derives from the otherworldly nature of a system of belief--believers are simply not supposed to care for such materialistic indulgences. Another line of argument is ethical--a community defined by its charity betrays its sacred trust when it accumulates wealth as the less fortunate suffer. 
Nonetheless, there's a rich tradition of delirious diademic display, and the persistence of such practices reminds us of the intimate connection between religious sentiment and our fashion sense.
As the anthropologist Ellen Dissanayake has observed, human beings display a predilection for "making special." The resonance between religion and art reflects their common roots in our desire to transcend mere existence; for many people across the globe religion needs style to soar.
The problem, of course, is one of proportion. Finding what the Buddha called the "middle way" is a dynamic process, which is why within any given faith we'll find a yin and yang--or a Benedict XVI and a Benedictine monk. Still, as Almostgirl aptly reminds us, perhaps it would be in order for Pope Benedict to follow the example of his more humble counterparts.
My own pick for a model would be his most immediate namesake, Pope Benedict XV, who replaced the gems in his papal tiara with glass after selling them to benefit veterans of World War I. After all, if PBXVI wants to dispel the allure of liberation theology & charismatic evangelicalism among the world's poor, wouldn't a public charity sale be more influential than abstract theological debate?
EXTRA: You can see Benedict XV's famous faux tiara at the Milwaukee Public Museum, which is hosting the last stop of a U.S. tour of Vatican treasures. For an excellent write-up of "Saint Peter and the Vatican: The Legacy of the Popes," check out this article from the Milwaukee Sentinel Tribune, the source of tiara pic above.
This is a fascinating subject. It brings to mind a phrase coined by an astute 20th century buddhist teacher, Chogyam Trungpa, Rinpoche. He wrote a book called "Cutting Through Spiritual Materialism". I haven't cracked that one in a while but have been revisiting another of his books recently, "The Myth of Freedom".
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