Her name was Rae Farley. Neil had a tumor removed from his spine in the 1970's and experiences chronic Back pain because of it. Rae also has a very similar condition causing severe back pain which, unfortuneately, put a strain on her's and Neil's 11 year relationship. They had split up in 2008 I believe.
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No, he is not married, but has recently become engaged to Katie McNeill. Rumour has it, that they will marry in the Spring of 2012.
when his wife received a big Diamond Neil Diamond was last married to Marsha Murphey in 1995.