I made this video to demonstrate how you can levitate something using diamagnetism. The video is pretty self explanatory but leaves out some details...
The magnets are neodymium magnets. An alloy of the rare earth metal. They are incredibly strong.
The ferrofluid is a suspension of nano scale particles of magnetite, haematite or some other compound containing iron. The particles are suspended in a surfactant, which in my case is oleic acid (I think). The particles are kept in permanent suspension my Brownian motion. The fluid forms into points like iron filings would because of an effect called normal-field instability.
Here are some pictures (click to enlarge):
You might also like these other posts about magnets.