Gut cells create insulin producing cells...

[carbz]

Here is another to add to the never ending list of potential treatments..

http://www.sciencedaily.com/releases...0311150719.htm

The only thing I totally disagree with here is at the bottom they suggest "insulin is safe"....

[Cookie Monster]

This is an interesting area. This 2009 paper from a researcher who splits his time between India and Australia suggests using cells from the gall bladder or intrahepatic bile ducts.

The liver, gall bladder and pancreas all develop at about the same time from the same types of embryological tissues so their progenitor cells are very similar and hence could offer a treatment.

I imagine there would still need to be some sort of therapy to stop the immune system targeting the cells that are manipulated by the proposed treatment as they will essentially become islet cells outside the pancreas.
But then there would not need to be the intensive immunosuppressant therapy required by islet transplants. Intriguing stuff.