Betsey, you seem a little confused. Any child Diana (not Diane) might have had with Dodi Fayed would not have been in line to the throne. Her children by Charles are in line through their descent from him not her.

That's the whole point. The position is filled by the applicant most closely related to the existing holder. Unless, of course, the people don't like the applicant or the holder, when they will be politely asked to leave and the job offered to someone else. (see James II/William and Mary or the 47 people who were more nearly related to the Stuarts that George I, but weren't suitable for some reason. Or in Bavaria, after mad Ludwig had been found floating face down in the lake with his psychiatrist, his uncle got the job because his brother was too out to lunch even for them).